Public Bill Committee

[Hugh Bayley in the Chair]

Clause 125  - Commencement

Amendment proposed (this day): 133, in clause125,page95, line19,at end insert—
‘() sections [Power to modify energy supply licences: domestic supply contracts], [Section [Power to modify energy supply licences: domestic supply contracts]: procedure etc], [General duties of Secretary of State] and [Consequential provision] (domestic tariffs: modifications of energy supply licences);
() section [Powers to alter activities requiring licence: activities related to supply contracts].’.—(Mr Hayes.)

Question again proposed, That the amendment be made.

Hugh Bayley: I remind the Committee that with this we are discussing the following:
Government new clause 13—Power to modify energy supply licences: domestic supply contracts.
Government new clause 14—Section [Power to modify energy supply licences: domestic supply contracts]: procedure etc.
Government new clause 15—General duties of Secretary of State.
Government new clause 16—Consequential provision.
Government new clause 17—Powers to alter activities requiring licence: activities related to supply contracts.
New clause 6—Cheapest tariff—
‘A company supplying electricity, gas or heating oil to a domestic customer shall, at least annually, inform the customer of the cheapest tariff available to that customer (based on that customer’s current method of payment and usage during the previous 12 month period) and move the customer to that tariff if that customer is aged 75 or over.’.
Government amendment 135.

Gordon Henderson: I have not actually said a great deal during this process, and I will not detain the Committee for too long this afternoon, but I have a couple of queries on new clause 6 that I hope can be clarified.
I come from a pretty rural constituency where many people use heating oil or liquefied petroleum gas, and I must declare an interest by saying that I am one such person. It is clear to me as a user that my supplier does not actually the tariff; I pay whatever the going rate is. I would like some clarification from the proposers of new clause 6 as to whether, when they mention the suppliers of heating oil to domestic customers annually declaring the cheapest tariff, they actually mean the cheapest tariff of the company supplying the oil or the cheapest tariff that is available from other companies as well. If it is the latter, does that mean that garages that supply oil and fuel for cars will eventually have to do the same? As a consumer of LPG in the home, I know that it is expensive. My gas bill is approaching £1,500 a year, but I probably spend, as an average motorist, twice as much as that a year at the pumps when I fill my car. If we are talking about protecting consumers, we ought to protect everybody. Does “cheapest tariff” mean that of the company supplying the consumer or the cheapest tariff collectively?
I have another point, which touches on what the Minister, my right hon. Friend the Member for Bexhill and Battle, said earlier about whether consumers will automatically be put on to a particular tariff whether they choose it or not. He asked whether someone on a green tariff who uses renewable energy, even though it may not necessarily be the cheapest, would be forced on to the cheapest available tariff. Frankly, new clause 6, as it stands, does force people on to the cheapest tariff. I am sure that that is not the intention of those who tabled the clause, but I will read it to them and they can perhaps clarify the matter:
“A company supplying electricity, gas or heating oil to a domestic customer shall, at least annually, inform the customer of the cheapest tariff available to that customer…and move the customer to that tariff if that customer is aged 75 or over.”
It does not say that the customer must be in agreement or that the customer has a choice. The new clause would make it obligatory, in law, for the company supplying the oil to move a customer on to the cheapest tariff if they are over 75—[Interruption.] It does not say that in the clause. That is all I wanted to say, and I would welcome some clarification.

Alan Whitehead: You suggested earlier on, Mr Bayley, that hon. Members might make their points in contributions rather than interventions, so I am carrying out your advice to the letter by making a contribution.
The direct answer to the question of whether new clause 6 forces people over 75 on to particular tariffs is that were new clause 6 to go into the Bill, it would stand alongside the other Government new clauses—unless they were withdrawn or voted against in such a way that they fell—and new clause 13(3)(e)(ii) refers to
“offering the customer, or inviting the customer to switch to, a different domestic tariff or different supply contract terms.”
One clause would therefore be read in conjunction with the other clause and that is how that new clause 6 would actually work.

Robert Smith: How would the person reading the two clauses know which was supreme?

Alan Whitehead: Clause 13 would go into the Bill as the primary clause for the purpose of this particular section and therefore the other clause would go in in the context of that section. That is exactly the answer that the Minister gave me the other day about possible clashes between two clauses relating to investment contracts.

Gregory Barker: So just to be clear, if the energy company sent out a notification of the cheapest tariff available, which could be a cheap coal-based tariff, a variable coal-based tariff, and the customer was currently on a green tariff, if they did not respond to that communication—perhaps they did not open it, or did not receive it, or they put it in a pile to act on later—they would be switched off their green tariff and on to that coal-based tariff. Is that right?

Alan Whitehead: I am not sure that the Minister has looked as closely as he might at new clause 13(3)(e) which states:
“for requiring a licence holder to change the domestic tariff or other supply contract terms on which it supplies gas or electricity to a domestic customer by—(i) switching to a different domestic tariff or different supply contract terms, unless the customer objects”.
Under the circumstances the Minister outlined, if the customer put an offer behind the clock on the mantelpiece, as it stands precisely what he suggests might happen under new clause 6 would happen under new clause 13. The Minister may have hit on something that he should perhaps go away and look at. He might look at how new clause 13 might work or he might accept my suggestion that the two clauses would work alongside each other and that things would work reasonably well under those circumstances.

Gregory Barker: There can be no doubt that the intent of the Bill, which will be complemented by secondary legislation—the Committee still has not seen it and that is not specific to this Bill, but to any Bill with secondary legislation attached; I appreciate that that makes scrutiny that little bit more difficult, but that is nothing new—is to put people on the cheapest tariff, but respecting their preferences. It seems that this measure simply puts people on the cheapest tariff full stop, which would have the effect of moving people off a green tariff and on to cheap coal.

Alan Whitehead: The Minister’s first line of defence is, “If you knew what I knew and if you were privy to this new secondary legislation then you would know a lot more about the Bill.” As we are not privy to the secondary legislation, clearly we do not. Secondly, he would have to remove this subsection from anything that went into the Bill in order to give new clause 6 the effect that he has suggested it has.
I accept that there is conceivably a conflict between what new clause 6 says and what new clause 13 says. However, when I raised the question a little while ago—this can be looked up in Hansard—of the possible conflict between two clauses involving investment instruments, the Minister of State, Department of Energy and Climate Change, the hon. Member for South Holland and The Deepings, told me which clause was the superior clause, particularly in relation to repeals, and that there would not be a conflict in the way that I had suggested.
Ministers cannot have it both ways round. Either this clause is the main clause in this part of the Bill and other clauses are subservient, and new clause 6 should be read in that context, or it is not, in which case the subsection should be withdrawn for clarification if the Minister wants that to come about. As he clearly does not, he will probably want the status quo to remain as far as the clauses are concerned.

Gregory Barker: This is a small point, but it needs a slightly greater explanation to be absolutely clear that this is not the case, but I will respond in my speech rather than by way of intervention.

Alan Whitehead: I remind the Minister that we are the Opposition and he is the Minister. We do not necessarily have to explain exactly how all legislation, including secondary legislation, will work. The Minister has access to that secondary legislation. If there were to be any conceivable conflict between a new clause and another clause that went into a Bill—were that to be passed—it would be a relatively straightforward issue, as the Minister said, to clarify, by secondary legislation, what is the superior part of the legislation, along the lines that the Minister, the hon. Member for South Holland and The Deepings, set out previously. However, that is not what I want to talk about, although it is connected with new clause 13(3)(e). The fundamental question is whether new clauses 13 to 16 comprise powers that we do not already have under existing legislation. It is incumbent on the Minister, when he is replying to this debate, to set out which parts of those clauses are indeed new, and which parts of those clauses do indeed replicate existing legislation. New clauses 13 to 16—I accept that new clause 17 talks about different issues—talk about the powers that are set out under the Utilities Act 2000 relating to modification of standard conditions of licences. Section 35 of the Act goes into some detail about how the authority, Ofgem, may modify the standard conditions of licences, which are set out in section 6(1) of the Electricity Act 1989 and in legislation on gas.
The section in the Utilities Act 2000 to modify standard conditions of licences is not bounded; the authority may do anything it wishes to modify standard conditions of licences except for one thing. Let me explain. Section 35(5) of the 2000 Act enables the Secretary of State
to direct the Authority not to make any modification,
and if the Secretary of State has directed the authority not to make a modification, the authority will comply with the direction. The Secretary of State can intervene to stop the authority making a modification to a licence—but it is otherwise unbounded. That is a negative power.
In section 76 of the Energy Act 2011, the Secretary of State was given the power to modify electricity supply licences subject to the question of providing information about tariffs. The section states:
“(a) the amount of the tariff;
(b) the amount the customer would have paid or saved in relation to any past period if the customer had been on the tariff for that period;
(c) the amount the customer would be likely to pay or save in relation to any future period if the customer were on the tariff for that period;
(d) where to find further information about the tariff;
(e) how to switch to it.”
It is clear in section 76 of the 2011 Act—incidentally, new clause 16 seeks to repeal those passages—that the Secretary of State has a power, particularly in relation to moving people to the lowest tariff, offering it to them, or inviting them to go on it. The Secretary of State has the power to do that, even if the authority does not otherwise agree to do it—that is, the Secretary of State may directly undertake that action. The authority has a power to modify licences, pretty unbounded, and the Secretary of State has an additional power to make the authority modify licences in a particular way, relating to lowest tariff provision.
That is my interpretation of how the legislation stands. Of course, one might not consider, particularly in relation to section 76 of the 2011 Act, that my interpretation alone is sufficient to persuade hon. Members that that is the case. In 2011, the then Minister of State, the Member for Wealden (Charles Hendry) , who was in charge of the Energy Bill, as it was then—he was sitting next to the Minister of State, the right hon. Member for Bexhill and Battle at the time—had this to say about what was clause 74, and is now section 76 of the 2011 Act:
“The Bill will allow the Government to require suppliers to inform customers about their lowest tariff and how to switch to it.”––[Official Report, Energy Public Bill Committee, 16 June 2011; c. 336.]
That power was included in the Energy Bill—subsequently the Energy Act 2011. The new clauses would replace those measures, and in some circumstances, appear to narrow some provisions in the 2011 Act. The effect of the three new clauses, if anything, is not to provide new powers, but to remove some elements of related powers, particularly as far as the Secretary of State is concerned.
One might ask oneself, “How have we got to a position where we are debating three very detailed clauses, even though it appears, on the face of it, that all the powers that are necessary in order to do what it is claimed those clauses wish to do already exist in legislation?” If one were a very world-weary and cynical Member—not that I am—one might refer to what the Prime Minister said at Prime Minister’s Questions Time, when he announced that energy companies will
“have to give the lowest tariff to their customers”.,
We are not debating today, as the Minister emphasised a few moments ago, that anyone will have to give the lowest tariff. Indeed, he was at pains to emphasise that were new clause 6 to be enacted, people over 75 would have to go on a particular tariff. I was at pains to emphasise—I think he also emphasised—that that was not the case, that Government new clause 13(3)(e) would offer or invite the customer to switch to a different domestic tariff.
The Prime Minister has not exactly had a win, shall we say, in terms of what he said in the House, as far as the new clauses are concerned. We are debating offering tariffs today, not having to give them. The Prime Minister also said—it was slightly before, and rather missed—that the
“hon. Gentleman will welcome, that we will be legislating so that energy companies have to give the lowest tariff”. —[Official Report, 17 October 2012; Vol. 551, c. 316.]
It would be extremely difficult to legislate if the legislation already existed, would it not? Obviously, one could not legislate if all the powers that one needed were there already. However, one could, of course, propose remarkably similar legislation to what was previously there, to give the illusion that one was legislating, in order to carry out what the Prime Minister had said in response to parliamentary questions. If one were a cynical and world-weary Member, one might think that is what the whole exercise is about.
That is why it is important that the Minister sets out for the Committee the specific things in new clauses 13 to 16 that the authority, the Minister, or both combined, could not previously do, which they could do if the legislation were passed, in such a way that hastens the idea of customers being offered the lowest tariff. I also remind the Minister that, when the Prime Minister made his statement in Prime Minister’s Question Time, Ofgem was already carrying out an exercise with this in mind, apparently through the powers that it already possessed, which are remarkably similar to the powers in this legislation.
I hope that the Minister will be able to satisfy the Committee on this particular matter. If he is unable to do so, we will conclude that we have been wasting our time this afternoon. The people in the Department who have been working so hard to get this legislation together would also have been on a fool’s errand, as far as getting something on to the statute books that was already there and could have satisfied all our requirements.

Albert Owen: I will follow your guidance, Mr Bayley, and not raise the issues I raised in interventions. I will keep to the new territory that was encroached on by the hon. Member for Angus, which I think is very important. I am sure that the Minister wants to listen to this; I have some specific questions for him.
When the Prime Minister made his announcement at Prime Minister’s questions, he was quite clear that everybody would go on to a lower tariff. That is how it was understood by Members of Parliament and their constituents. But now there is a qualification that means that for many people, that simply will not be the case. When this was first raised with the Secretary of State by the Energy and Climate Change Committee, he was quite clear that because it was so soon after the Prime Minister had made this announcement, we would have to wait for the Energy Bill to come forward. The Bill was delayed on a number of occasions, but it arrived before us a few weeks ago. The details of these tariffs were not contained in the Bill—in fact, we only had these amendments this week. Therefore we have had very little time to scrutinise them thoroughly. However, the Minister knew about them— because he helped to draft them —and he has had the opportunity to explain them to us today.
There is one category that has failed to convince me—and, if they are honest, many other Members—with regard to vulnerable members of our community, those on pre-paid meters. They do not have the choice of smart phones or of direct debit, as many of us have. I want to ask a specific question—not to trip up the Minister, but to get absolute clarity. Will those people who are now on an expensive tariff, because of their circumstances, be able to go on a cheaper tariff after this legislation? We have not seen the secondary legislation, but the Minister can tell us at this moment. I do not think that that will be the case, and that would let down many vulnerable people. It is essential that the Minister clarifies that. As the hon. Member for Angus said, there are many ways of helping; to be fair, the companies themselves are trying to help those people. PayPoint offers some facilities for them, but they will still be on the lowest category and paying the most. We need clarification on that.
On the regulator, my hon. Friend the Member for Southampton, Test is right to say that this amendment could restrict some of the powers that already exist. I know that the Minister wants to be helpful in looking again at the remit of the regulator for domestic heating fuel. Many of my constituents who were listening to the Prime Minister and the Government were paying more for their domestic heating than those on electricity and gas. They do not understand how the privatisation of gas and electricity came about. They were led to believe that they would have help with their domestic fuels; it was not argued at the time. I have been campaigning about this since I came into this House, because in certain areas these people do not have the opportunity of electricity and gas tariffs. Some regions of the United Kingdom pay more for their electricity when they are off-grid, so they have a double whammy of having to pay the high cost of domestic oil and for electricity that is charged at a higher rate than in some other parts of the country.

Gregory Barker: I do understand the case the hon. Gentleman is making, but very few customers are off the electricity grid.

Albert Owen: If that is what the Minister understood me to say, I am sorry that I said it wrong. What I was saying was that those who are off the gas grid pay more for their electricity. For example, as I am sure the Minister knows, in Wales there are regional variations between what people pay. In peripheral areas of rural Scotland and Wales, people pay more for their electricity than those in other parts of the country. On top of that, they must pay more for domestic heating oil than if they were on the gas main. That is my point.
We cannot change the Office of Fair Trading’s monopoly investigations through the Bill, but we can give the same protection to those who are off the gas grid through the regulator. Ofgem’s priority under its remit is to protect customers. There is no one to protect the customers I am referring to, but there is an opportunity to do so in this Energy Bill. I keep hearing from successive Governments that they will provide that protection, but Energy Bill after Energy Bill comes along and does not do so. Many of the people we represent have been ripped off over many years and have paid a lot more, which is unfair. I hope that the Minister will consider the matter of prepaid meters seriously, and then work with his fellow Ministers to look at the role of the regulator so that customers in all parts of the United Kingdom enjoy the same protection from the regulator that those on the gas and electricity grids enjoy.

Luciana Berger: I will reiterate some of the points I made earlier. It is clear that without the secondary legislation we are unable to have a full debate about what exactly the Government intend. We very much look forward to the introduction of the secondary legislation, and seeing the details of how it will work in practice. It was clear from the exchanges between my hon. Friend the Member for Southampton, Test and the Minister that the Minister knows what he is expecting, but the Opposition are in the dark about exactly what those details will be. To some extent, we have been speaking at cross-purposes, and the hon. Member for Sittingbourne and Sheppey sought clarification.
As I said in my speech, and I am happy to reiterate, under our new clause customers aged over 75 would be informed of the cheapest tariff available to them by their supplier and moved on to it unless they opted out. At the moment, people do not opt on to the cheapest tariff, and those most vulnerable groups should have the opportunity to be on the cheapest tariff. If they decide otherwise, they can make that choice.

Gregory Barker: I honestly do not think the hon. Lady means the cheapest tariff. I think she means the cheapest price within that tariff. If she means the cheapest tariff, she is suggesting that someone on a green tariff would be switched not just to the cheapest price available within a tariff suite, but off that green tariff and on to a coal tariff. Will she clarify, because I think that is the root of the misunderstanding? She does not mean tariff, because there will continue to be several tariffs, certainly under our legislation; she means the cheapest price available within that tariff suite.

Luciana Berger: I thank the Minister for his intervention. We are talking about different things. He may recall from my earlier contribution to the debate that I was responding to the wider issue of different tariffs. The point I have just made was specifically in respect of customers aged over 75. In that regard, we would put them on the cheapest tariff, and it would be up to the consumer to opt out of the tariff.

Gregory Barker: So to be clear, someone aged over 75 on a green tariff would be automatically taken off the green tariff and put on to any cheaper tariff—

Luciana Berger: Offered the option.

Gregory Barker: There is a difference. People are offered cheaper tariffs all the time. The key measure that we are concerned with is to take someone off automatically. They would then have to opt out of that and make a positive decision not to change instead of just being offered it through the usual marketing channels.

Luciana Berger: I thank the Minister for his intervention. Yes, people would be offered that cheapest tariff and, over a period, moved on to it, unless they decided that they did not want to be. We already know that people on green tariffs, for instance, are the most active consumers, and those who chose green tariffs will therefore be more inclined to read letters they receive. They have actively chosen a green tariff and, because they have decided to opt out and so are already in conversation with their energy supplier, they will be able to choose to remain on it.
This is about giving people that choice, and ensuring that the most vulnerable consumers—those aged over 75—are moved on to the cheapest available tariff. We know that those people do not move to such a tariff at the moment, because they are less likely to have access to the internet to identify the best tariff for them to switch to, and less likely to have access to a bank account. The 1 million people in this country who do not have a bank account cannot benefit from direct debits.

Gregory Barker: To be clear, people would therefore be automatically moved not only off green tariffs to the cheapest tariff, but off fixed-rate tariffs that they had elected to be on.

Luciana Berger: Yes, as we have said before. We have discussed many times how our proposal would mean that the over-75s were on the cheapest tariff from their supplier.
I return to the point that we have not been given the detail, and we would like to have it. I am only sorry that it has not been made available today. Clearly, the Minister has seen something in draft that we are not privy to. It makes it difficult for Opposition Members if we are essentially in the dark. The proposal has been put forward by the Opposition on many occasions, and we will therefore seek to press the amendment to a Division.

John Hayes: For the information of the Committee, following our earlier debate about offers to customers in relation to heating oil, I have since written to my officials to ask them to effect the commitment that I made, which was that we would hold a meeting for Members from across the Committee to talk through those matters and their possible relationship with the Bill, because there will be issues that go beyond it. I wanted to put on the record that, as I pledged to do, I have actioned that, and I expect to be in touch with Committee members shortly.

Michael Weir: I thank the Minister for what he says, which is very welcome. He mentions issues that go beyond the Bill. I have been in communication with the Department for Work and Pensions about such issues, and I have put it in touch with suppliers who want to talk about the possibility of a social tariff. Will the Minister expand the meeting to take that in, so that we can have a full picture?

John Hayes: I expect that officials will be present at any such meeting, and the hon. Gentleman’s suggestion is helpful. We need to consider the issue across Departments, so I will certainly approach the Department for Work and Pensions. I think that the meeting will be genuinely open-minded, and when we consider a range of options, it is important to do so in the spirit he describes. I am more than happy to agree to that.

Tom Greatrex: Further to the point made by the hon. Member for Angus and the Minister’s response, the Minister will be aware that an all-party group has taken up such issues across different parties and different parts of the UK. Is the Minister minded to engage with members of that all-party group in those discussions?

John Hayes: I am absolutely inclined to do so, but I am mindful that there is a slight risk of the debate becoming one of the whole House, because so many people have a perfectly legitimate and understandable interest in it. If we are to confine it and move forward, we will need to think carefully. It would of course be entirely appropriate to link it to the work of the all-party group, and frankly it would be impertinent of us not to.

Gregory Barker: This has been a very interesting and worthwhile debate, even if we have been somewhat confused or talking at cross-purposes at times. I fully accept the point that the Opposition make: there is a slight difficulty in understanding or rather scrutinising the Government’s full intention, because further detail will be added in secondary legislation. We also await a formal response to consultation, which we cannot prejudge. In terms of the concept, I accept that parliamentary protocol and procedure perhaps make for an imperfect debate. However, I can be absolutely explicit about the intention of the measures under scrutiny and assure members of the Committee that the secondary legislation that we bring forward in due course will deliver on the Prime Minister’s promise in full. The Prime Minister was obviously very brief when he described the tariffs. It was a response to a question at Prime Minister’s Question Time. It was not a comprehensive statement. He was not at liberty to give chapter and verse on a policy in what is quite a complex area.
What is clear is that the Opposition, who are not simply giving a response to an answer in a crowded House of Commons but have thought through their response, have got themselves into a right pickle. The hon. Member for Liverpool, Wavertree got herself into a right pickle because now her explanation is that the Opposition propose to move every person over 75 on to the cheapest tariff. At the moment there are more than 400 tariffs. Our proposals are to simplify that radically. The Ofgem consultation paper and our own consultation paper suggested four tariffs, but the Opposition are saying that anyone over 75, no matter what tariff they are on, will be moved to the cheapest tariff. I believe that the Ofgem consultation paper suggested that the core choice might consist of a fixed-rate tariff, an internet tariff, a variable-rate tariff and, most likely, a green tariff, but somebody on a green tariff—

Barry Gardiner: A prepaid meter tariff.

Gregory Barker: And a prepaid meter tariff. Under the Labour proposal, in new clause 6, somebody on a green tariff would be moved off annually, so they would elect to go on to a green tariff and then they would be moved to a cheaper, dirtier tariff if there was one available. That cannot be right, particularly for someone over 75 who goes to the trouble of selecting a green tariff. They make a conscious choice. They go for a clean, green choice or perhaps a fixed-rate choice and then find themselves moved off it. They have to keep opening the mail to find out whether they are still on the tariff that they elected to go on in the first place. It is a very muddled proposition, and the reason why it is muddled is that the coalition Government have shot Labour’s fox. The Opposition put forward an ill-thought-through proposal to simplify things for the over-75s, even if in reality what they proposed in new clause 6, or at least new clause 6 as it was explained by their Front-Bench team today, would not do that.
The Government propose not just to simplify the matter and give people over 75 the best deal, but to give everybody the best deal, and importantly—the hon. Member for Liverpool, Wavertree referred to this in her opening remarks—the best deal in line with their preferences. It is a sensible, balanced judgment, exactly in line with what the Prime Minister pledged to do. We have come forward, in Committee, with a sensible, more detailed understanding of what the Prime Minister outlined in general.

Alan Whitehead: Forgive my continued puzzlement, but the Minister says that after the secondary legislation is introduced, it will carry out the Prime Minister’s pledge in full. That pledge was to make people move to the lowest tariff. Would that not turn out to be exactly what the Minister is accusing the Opposition of proposing in the new clause?

Gregory Barker: The Prime Minister was speaking in the House of Commons and being necessarily brief. He was not making a statement. He was not speaking at length. He was not at liberty to define at greater length what the policy would mean. That falls to the Committee. By definition, what we do in this place is to expand on something that is summarised. The Prime Minister was very clear, and we are now giving effect, in a detailed Bill and through a raft of clauses, to his clear pledge. The Opposition can squirm as much as they like. They are just sore because they did not come up with the measure, and because their proposal is not half as radical as the coalition Government’s. They are squirming because we are acting far more radically, far more ambitiously and far more comprehensively than they did in 13 years.
During 13 years of Labour, we had an explosion of tariffs, making it much more difficult to switch and bemusing the consumer. There was nothing like our proposal. The last person to sit in charge of the Department of Energy and Climate Change is now Leader of the Opposition. What did he do to help the consumer? Zip, zero. Within two and half years, the coalition Government have come forward with a radical response that really gets to the heart of the matter and gives life to a simple pledge. The Conservative party has a proud tradition of tariff reform, and I like to think that we are carrying on the work of Sir Robert Peel.

Albert Owen: The Minister is really enjoying this little knockabout. It might be good in sixth-form politics, but it does not help us with the Bill. At the beginning of his contribution, he said that he understood that the Opposition were in a difficult position because there was little detail in the Bill. He now says that the Bill contains great detail. Which is it?

Gregory Barker: There is a lot more detail than there is in two lines in response to a question at Prime Minister’s Question Time. We have come forward with a Bill that gives enabling powers, and those powers will be detailed in secondary legislation.

Albert Owen: When exactly?

Gregory Barker: The hon. Gentleman has been in this place longer than I have and is probably more versed in parliamentary process than I am. There was a statement of intent, which was followed with a Bill.

Barry Gardiner: A mis-statement.

Gregory Barker: There was no mis-statement at all. We were absolutely clear. There can be no question about that. The hon. Gentleman is absolutely right that previous Governments have gone round and round in circles and have never come up with such a proposal. The Prime Minister could not have been clearer or less ambiguous. The Opposition are just sore because they are on the back foot. We shot their fox.

Barry Gardiner: I am so delighted that I have managed to catch the end of this contribution. When the Prime Minister was so clear, was he so clear with the word “tariff” or with the word “price”?

Gregory Barker: We have already done this. If the hon. Gentleman had been here earlier, he would know that. Nobody can be under any illusion as to what the Prime Minister intended. We have spelled it out in a great deal of detail. We issued a consultation document. In a thoughtful and thorough way, our proposals give life to the Prime Minister’s clear pledge in exactly the same way as acres of legislation gave life to Labour’s pledge card in 1997. A simple pledge from the Prime Minister at PMQs in the autumn has given rise to a responsible Bill containing responsible pledges. We will do it. Unlike new clause 6, there is no ambiguity except to say that further detail needs to come forth in secondary legislation. I would love to debate it now. The detail is not being held back for lack of transparency; it is simply parliamentary process. We will have the opportunity to scrutinise the secondary legislation in the usual way. I can, however, tell the Committee now that what that legislation will not do is introduce a system that automatically moves the over-75s from green tariffs, or other tariffs they may have chosen, on to the cheapest, dirtiest tariff available, which is what Labour Members are suggesting. I have probably exhausted the Committee’s patience on that issue, and a number of other points were raised that I would like to deal with.
The hon. Member for Ynys Môn said that there were delays to the Energy Bill. I assure him that the Bill was not delayed; we said we would introduce it in November, and we did. We made it clear that we would consult consumer groups, the industry and others on tariffs before bringing forward proposals for the consideration of the House.
I think that we have discussed the issue raised by the hon. Member for Southampton; new clause 6 could not be incorporated into the Bill as he suggested—or as drafted—without creating greater uncertainty. Section 76 of the Energy Act 2011 enables the Secretary of State to require information to be provided, not to move customers on to different tariffs, and not to simplify the tariff structure. Section 76 will be repealed by our new clauses, and its power is now found in new clause 13(3) and (4).

Alan Whitehead: It is the authority that simplifies the tariff structure. For the Minister to say that it is a different power because it does not say that in clause 76 of the Energy Act 2011 is totally irrelevant. It is what the authority does, and what the authority already has power to do, that I asked about.

Gregory Barker: If by the authority the hon. Gentleman means Ofgem, then yes, he is partially right. The fact of the matter is that Ofgem can be challenged; it can be judicially reviewed. It is open to the big six to challenge Ofgem, and that can involve lengthy delays. That is why we have been very explicit from the outset. We made that pledge in the autumn, we want to crack on and we also want to do so without any uncertainty or ambiguity. By putting this into law, we believe that it is most unlikely that there will be any challenge to Ofgem, and that brings greater certainty—absolute certainty—whereas the hon. Gentleman is quite right that beforehand there was some ambiguity. We are ending that ambiguity, and we are bringing certainty that this enjoys the power of statute, rather than that of an authority that can be challenged in the courts.
The hon. Member for Angus quite rightly raised the issue of prepayment meters. I know this is an issue which concerns all of us who are worried about fuel poverty, and it is driven by a number of factors. These are real issues, not just of poverty but also of fairness. However, there are other issues, such as moral hazard, and the cost to other consumers, which need to be balanced. I totally understand the hon. Gentleman’s concerns, but I assure him that customers on prepayment meters will benefit from the legislation. They will be moved to the cheaper tariff or price for their payment type, and they will be advised of cheaper alternatives, for example, a fixed-term tariff. I am also informed that even people with debts of up to £500 are not precluded from switching suppliers.

Michael Weir: To be fair to the energy companies, the problem with prepayment meters is that they tend to be on a standard variable tariff. I cannot see that anything other than one of the other, direct debit, tariffs would actually be cheaper, unless the legislation specifically instructs the energy companies about that. Will the Minister also address the issue of debt? I was quoted by Citizens Advice that £7 of every £10 put in the meter is to meet debt. I appreciate that debt has to be paid, but that seems an extraordinary way of getting back money from people who are on the breadline and struggling to heat their homes.

Gregory Barker: This is a very difficult issue and I understand exactly what the hon. Gentleman is saying. I do not think there is an absolute right answer, not least because there is inherent unfairness in that different circumstances lead people into debt, some of which are in their control, some of which are entirely outside their control. It is very difficult for politicians to make sweeping statements about fairness or people’s individual circumstances. However, I totally understand that there are people who, through no fault of their own, end up in those circumstances and it seems very harsh. However, that area is effectively in the realm of the Department for Work and Pensions rather than the remit of electricity market reform.

Michael Weir: With respect to the Minister, it is not in the area of DWP. It is caused by the cost of the tariff and the way that the debt is recovered through the meter. These are matters that are properly the object of energy companies, Ofgem and his Department. We must be serious about tackling fuel poverty. I accept that there may sometimes be people who are their own worst enemies, but many people are not. They could have been on a cheaper tariff, but their circumstances mean they have ended up being put on a prepayment meter because of debt, and when that happens it deepens debt.

Gregory Barker: Let us be clear: we are dealing with tariffs, not the prepayment element in the prepayment meter. The hon. Gentleman raises a very good point, but I am afraid that that specific element does not form part of the Bill and nobody has laid any amendments to the Bill. The hon. Gentleman had an opportunity to and has not laid any amendments that would deal with that.

Michael Weir: This is the first time we have had a chance to debate anything to do with tariffs. We could not put down amendments on these provisions because they will not be in the Bill until they are passed. We can perhaps do it on Report.

Gregory Barker: Of course, that is open to the hon. Gentleman. As we stand here today there is not a Government amendment on the issue—it is not within the purview of EMR. He raises a legitimate point. It is difficult to be totally arbitrary about what is definitively a fair balance, not least because individual circumstances play such a huge role. This is something that comes within the remit of Ofgem. I invite the hon. Gentleman to have a discussion with me about Ofgem’s role, and using existing powers and legislation, to look at the fairness of the status quo. It may be that this is not something that requires legislation.

Graham Jones: On a very small point, when the Minister is talking about tariffs and tariff simplification, could he consider the issue of fixed tariffs that expire? There will not be—it will come in the secondary legislation—tariffs that expire from the fixed rate and are then on a higher variable rate, which seems to be a problem now. Will he be mindful of that, and ensure that customers are not shifted and that they are on a continuous fixed rate if there is a fixed-rate tariff, which there will be?

Gregory Barker: I think I understood the hon. Gentleman. I suppose it depends on whether the new fixed rate is directly comparable. For example, if a one-year fixed product has been withdrawn and the only other fixed-rate product is a five-year or three-year fix, it is not a directly comparable product. Where there is a directly comparable product, my understanding is that every time there is a better deal, everyone on that comparable product will be offered the better deal. However, where there is no comparable product, people will automatically be moved on to the best variable tariff.

Graham Jones: There is a plethora of tariffs now, and it is difficult for any Member to keep up with them all, but the simple explanation is that they are like mortgages; people can get a discount deal for two years. After that, if the customer does not say anything, they are moved to a higher rate. Will the Minister look at that? I would ask him to consider that it should not form part of the tariffs that will be put forward by the Government in secondary legislation.

Gregory Barker: I am not absolutely clear what the hon. Gentleman is saying. I do not mean to be deliberately obfuscating.

Graham Jones: What happens is that the customer is not notified; it is part of the original deal. They will have a fixed discount deal, which will end, and they will then go on to a variable tariff that is far higher, because that is part of the original deal and there is no break clause. Those are the tariffs that catch people out, because when the discount period ends, there is quite an escalation in the charge.

Gregory Barker: I understand. I do not know whether that would be possible. I will have to look into whether the customer would move from one fix to another fix. I think that they would be more likely to go on to the variable tariff, but it would be the best variable offer. There would not be different types of variable tariff—there would be one standard variable, which would be the default variable. There would not be special offers available only to new customers, for example, that would subsequently fix people on to an uncompetitive offer without them re-entering as a new customer.

Barry Gardiner: With mortgages, sometimes there is a period where the depressed rate is charged and then there is a lock-in for a particular period of time after that on the standard variable rate. That would be a distinctly unwelcome innovation in the energy market for precisely the reasons that my hon. Friend has just outlined. That is something we would seek assurance on.

Gregory Barker: We have not published the final proposal yet, so I cannot give an emphatic answer, but it is very difficult to see how that sort of mortgage-style tariff would be able to find its way into the very narrow band of choices we are going to introduce.

Albert Owen: Is the Minister saying that there will be an opportunity for people to transfer to cheaper tariffs offered elsewhere?

Gregory Barker: The whole gist of the legislation is that the default position will be that customers would go on to the cheapest variable tariff—there will not be a plethora of tariffs. The reason it is currently so complex is because of new customer offers—basically, there is a variable tariff and various other types of tariff, but there are also new offers that are not available to existing customers, which are designed to entice the small number of switchers. That is where the differential arises. Under our proposals, everyone will be able to benefit from the cheapest tariffs, although we will respect the preferences of individual customers so that they are not forced off green tariffs or a fixed rate.

Albert Owen: I fully understand that, but, in response to the hon. Member for Angus, the Minister said that the issue of the DWP and debts would be dealt with elsewhere. Is he saying that there would be cheaper pre-paid meter tariffs in his proposals?

Gregory Barker: Yes, absolutely. I can confirm that the scope will include pre-paid meters and their tariffs.
As for opting in or out, which was raised by the hon. Member for Angus, subsection (3)(e) would allow the Secretary of State to determine whether the moving of customers by suppliers from poor value dead tariffs to other tariffs is an opt-in or an opt-out. However, it will be not be up to suppliers, and our current intent is that customers would have to opt-out.
In her opening remarks, the hon. Member for Liverpool, Wavertree raised a valid point about unit pricing, which has been championed by Which? She is absolutely right that currently it is often difficult to compare bills, tariffs and offers because they are so opaque. The single unit rate proposal from Which? is a very interesting idea. We did not originally consult on it, and it is not something that a large number of other groups have lobbied on. However, I think that it has considerable merit, and I have met with Which? to discuss the idea in more detail and commissioned my officials to do more work on the single unit rate proposal.
There are potentially some unintended consequences or perverse impacts, particularly on vulnerable customers, which bears heavily on us. The intent around the single unit rate is to make a much more transparent, easily comparable pricing structure, which would make the energy sector much more akin to the petrol sector. There is a price per litre when filling up a car. There needs to be as much simplicity in the energy fuel market so that customers can easily make that cross-company comparison. We are looking at that actively. Ofgem looked at the tariff structure and proposed that all tariffs be structured as a standing charge and a single unit rate. That was the result of its consideration of this issue. The Which? proposals bring an additional dimension to the debate and that is what we now looking at.
The hon. Lady asked whether we were in favour of Ofgem’s tariff comparison rate. New clause 13(4)(b)(ii) allows for a requirement that suppliers provide a single figure or set of figures for the expected cost of their tariffs. This could include providing a typical cost similar to an annual percentage rate in order to help consumers make a more informed choice between the different energy suppliers. Ofgem has consulted on one, the tariff comparison rate. New clause 13(4)(b)(ii) would facilitate a TCR, or other standard comparator metric, but does not commit us to any specific model at this stage as we are still looking at this in more detail. However, as with other areas of detail, we have not formed a final view and will wait to consider Ofgem’s final position, including its proposed methodology, before making our final decision.

Robert Smith: When considering the proposals will he consider how those on dynamic teleswitching, those with off-peak tariffs, get to enjoy the same benefits of this reform of the tariff structure and the ability to shop around? He obviously cannot do that just now, but could he undertake to take that on board in that review?

Gregory Barker: Absolutely. Various issues also need to be taken into account. I can assure him that we will do that.
In conclusion, we are here giving life to the Prime Minister’s commitment radically to simplify tariffs and in so doing to boost consumer choice and drive genuine, transparent competition between the big six, but also to make it easier for other companies to enter the market. The smaller, disruptive entrepreneurial companies do not have a large customer base that they can milk, relying on the fact that they will stick on dead tariffs and only a small proportion will move. Our proposals have been strongly welcomed by many of the smaller companies that are keen to play a larger part in our energy economy.

Amendment 133 agreed to.

Clause 125 ordered to stand part of the Bill.

Clause 126 ordered to stand part of the Bill.

New Clause 8  - Decarbonisation target range

‘(1) It is the duty of the Secretary of State to ensure, in respect of each year in relation to which a decarbonisation target range is set, that the carbon intensity of electricity generation in Great Britain is no greater than the maximum permitted level of the decarbonisation target range.
(2) The Secretary of State may by order (“a decarbonisation order”) set or amend a decarbonisation target range in relation to a year.
(3) A “decarbonisation target range”, in relation to any year, means a range for the carbon intensity of electricity generation in Great Britain.
(4) Section [Meaning and calculation of “carbon intensity of electricity generation in Great Britain”] makes further provision in relation to subsection (3).
(5) The earliest year in relation to which a decarbonisation target range may be set is 2030; and the first decarbonisation order may not be made before the date on which the carbon budget for the budgetary period which includes the year 2030 is set by virtue of the duty of the Secretary of State under section 4(2)(b) of the Climate Change Act 2008.
(6) A decarbonisation order may amend a decarbonisation target range only if it appears to the Secretary of State that significant changes affecting the basis on which the decarbonisation target range was set (or previously amended) make it appropriate to do so.
(7) The Secretary of State may not revoke a decarbonisation order unless, in respect of each year in relation to which the order sets a decarbonisation target range, a decarbonisation target range remains in effect.
(8) A decarbonisation order may—
(a) amend section 23(4) of the Climate Change Act 2008 (alteration of budgetary periods) so that after “Act” there is inserted “or sections[Decarbonisation target range] to [Meaning and calculation of “carbon intensity of electricity generation in Great Britain”]of the Energy Act 2013”;
(b) repeal section 5 of the Energy Act 2010 (reports on decarbonisation and CCS progress).
(9) Provision made by virtue of subsection (8) may also—
(a) include incidental, supplementary and consequential provision;
(b) make transitory or transitional provision or savings.
(10) A decarbonisation order is to be made by statutory instrument and a statutory instrument containing a decarbonisation order may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(11) Before laying before Parliament a draft of a statutory instrument containing a decarbonisation order the Secretary of State must consult the Scottish Ministers and the Welsh Ministers.’.—(Mr Hayes.)

Brought up, and read the First time.

John Hayes: I beg to move, That the clause be read a Second time.

Hugh Bayley: With this it will be convenient to discuss the following:
Government new clause 9—Matters to be taken into account.
Government new clause 10—Further duties of the Secretary of State.
Government new clause 11—Meaning and calculation of “carbon intensity of electricity generation in Great Britain”.
Government amendment 134.

John Hayes: It is a delight to be able to address the Committee again after the useful debate we have just had on tariffs and their role in the Bill.
The new clauses set out the Government’s position on the decarbonisation target range for the electricity sector. We discussed that matter at some length earlier, and I believe that there is little doubt that the Opposition share the Government’s determination that a decarbonisation target for the power sector has the potential to increase certainty for investors in the large and long-term projects that will be necessary if we are to achieve the low-carbon future to which we all aspire.
I will explain why the Government are proceeding on the basis of the provisions before us. We have, as I said, already debated the matter at length, but to affirm the Government’s case I wish to make three relatively brief points. The first is, in a sense, one that I have trailed already, which is that Members on both sides of the Committee have been absolutely crystal clear about the need to provide certainty in order to inspire investor confidence. We have heard that from both Government and Opposition Members. There is absolutely no difference between us on that point. We also know that there is already a series of targets and measures that provide that kind of certainty, but there is a case to be made, and I have heard it made with cogence and enthusiasm, that further assurances would take us a step closer to increased certainty.
Our case is, therefore, that the powers should be available to the Secretary of State to do just that, and that, gauged in 2016 by the Government, taking into account the prevailing circumstances at that time on the basis of the best advice provided to them by the Committee on Climate Change and others, the Government could exercise those powers as a way of achieving that greater certainty, which is the product of greater clarity.
Secondly, our provisions importantly recognise that decarbonisation of the electricity sector is inextricably linked to the whole economy, in meeting our 2050 target. That matter has been widely discussed and considered by the Select Committee, a number of whose distinguished members we have on this Public Bill Committee. It is understood by, I think, the whole House that unless we take a cross-departmental, cross-Government view of the 2050 target, we are unlikely to achieve our objectives. A decarbonisation target range should not be set before the level of the fifth carbon budget, which covers the corresponding period, has been set in law.
We understand the salience of the electricity sector—of course we do—and the whole Committee knows that many of the other measures that we have introduced are designed to reinforce the commitment to a low-carbon generating mix, which is a necessary contribution to the target I have described. None the less, without waxing either too lyrical—if that were possible—or too wide of the mark, in your terms Mr Bayley, it is important to mention again that we know that in the transport sector, for example, it will be vital to achieve the 2050 target if we are to make radical changes.
My third and final point is that the new clauses introduce a simple, but effective, framework for meeting a target range which, once set, would be integrated within the framework already set by the Climate Change Act. I will say a word about each of those three points. I will try and say four things, making seven points in total, because asymmetry in oratory is rather like asymmetry in flower arranging: always better, for those of you who are flower arrangers. I can see one or two on this Committee who I imagine might be. I hope that will be a useful additional value that hon. Members have gained from their consideration of the Bill.
On the first of those four supplementary points, the important reason for the addition of these powers in the Bill is because they speak clearly of the Government’s commitment. It would have been possible for us to introduce a Bill without mentioning a 2030 target. After all, the 2050 target is well established. While there is much pressure for a 2030 target, I know that Committee members will realise that many thought it should not be mentioned at all. They will also realise that the addition of these powers came as a result of discussions across Government, which are no secret, including discussions of the Quad, where a bargain—in the words of the Secretary of State—was made. Of course, a bargain implied bargaining, and bargaining indeed took place.
As a result, these powers have emerged: the 2050 target to cut emissions by at least 80%, which is likely to require the electricity sector to be virtually decarbonised; the fourth carbon budget that runs up to 2027, which requires the UK to halve total emissions in the whole economy; and the 2020 renewables directive, which will mean 30% of electricity generation coming from renewables in 2020, compared with about 11% today. All these are important components in the certainty that I described. What the Bill does is set those in a long-term framework for electricity market reform.
My second supplementary point is that we are not satisfied. We are demanding of ourselves, as a Government should be. We should be ever critical of our own performance, for if we are not, we are unlikely to do our best and be our best. We are not satisfied with that. We have also committed to provide further clarity up to 2030 by issuing guidance to National Grid on an indicative range of decarbonisation scenarios for the power sector to 2030 consistent with the least-cost approach to achieve the overall 2050 target. I can see my hon. Friend, perhaps provoked by my remarks about flowers, is about to intervene.

Robert Buckland: I agree about asymmetry in flower arranging, but I am trying to conjure up the notion of a target range, which one associates with the military, and decarbonisation. Putting that to one side, my hon. Friend talked about the ability to set that range. Will he sketch out the breadth of that range? How wide would that range be? Would it be so wide as to be meaningless or a much narrower, proper target range?

John Hayes: That is an apposite question, because there are those who believe that even now we should set a target on the face of the Bill for an immensely demanding figure in respect of the reduction in carbon. Part of our argument is that the flexibility which these provisions provide gives us a chance to gauge what that range might be, in the context of the circumstances that prevail and in accord with—in concert with, in harmony with—the fifth carbon budget. And speaking of harmony, I am happy to give way to the hon. Gentleman.

Barry Gardiner: Could the Minister just clarify whether he abjures the range that has already been suggested by the Committee on Climate Change, namely that it should not exceed 100 grams per kWh by 2030? The Committee on Climate Change was quite clear that it believed that it would be better if it were about 50 grams per kWh. So would he say that the broad parameters of the range that the hon. Member for South Swindon suggested might be between zero and 100?

John Hayes: As the hon. Gentleman knows, almost every figure has been suggested, from 50 grams per kWh to 200 grams per kWh. We had those who believe that it should be set at 50 grams per kWh now, and they might be described as being at one end of the spectrum, and there are those at the other end of the spectrum who do not believe that we should have a figure at all. And slightly within that band, there are those who believe that we should set the figure somewhere between, as he described, 50 grams per kWh and 200 grams per kWh.
It would be premature, given what I have already said, for me to speculate on what we might do at the time when we fix this target, for our whole purpose is to fix the target then, and not now. Heaven knows, given that that is our purpose, Members of this Committee—alluring though they are—would hardly expect to encourage me to contradict that purpose by committing to a figure now. But I see an alluring form—well, I see the hon. Member for Southampton, Test—

Alan Whitehead: The question is whether the Minister is envisaging any limits at all on what the range might be, and if not, has he consulted his own impact assessment of 4 February 2013, which discusses three ranges? It indicates that the greatest welfare benefit would come from a 50 gram target in 2030, and indeed the best impact on customers’ bills would come from a 50 gram target in 2030. If he envisages having no target whatsoever, what value does he put on the impact assessment that his own Department has produced on target ranges?

John Hayes: I do not say that we envisage having no range whatever, because we already know, of course, what progress we are making in terms of carbon reduction. We have modelled a range of scenarios, as the hon. Gentleman suggests, and they are given life by what we have said in the impact assessment. I make no bones about the fact that the scenarios we modelled include 50 grams, 100 grams and 200 grams. I said earlier that the debate has ranged between different views, including the views of those who feel that there should not be a target at all, because of course we have those who think that there should not be a target or a power to set it. I have resisted those who take that view, because I am wholly committed to the purpose that I described at the outset of my remarks, and I know that the Committee will want to acknowledge that robust resistance.
However, to anticipate what might happen, when we have said that we want to take into account all the advice and circumstances that prevail at the time, would be unwise, given that the implicit range is the one to which the hon. Gentleman alludes, as I have acknowledged.

Barry Gardiner: I was not encouraging the Minister to speculate. I asked him a much simpler question, and that was whether he abjures the suggestion by the Committee on Climate Change that an appropriate range would be between zero and 100 grams, and that the limit of 100 grams was because beyond that a low-carbon trajectory to 2050 would not be achieved without disproportionate cost.

John Hayes: Speculation in politics is dangerous, particularly when one stands where I stand, rather than where the hon. Gentleman stands. I have learnt that speculation as a Minister has even more profound dangers. So, although I am happy to say that the power might be used given the circumstances, I am also happy to say that it might be in the range set out in our impact assessment, to which the hon. Member for Southampton, Test drew the Committee’s attention and which I have also mentioned. It can be fixed only given the circumstances that prevail at the time, which takes me to the third of my three supplementary points.
It is not as if we are debating the matter out of context, which is the £7.6 billion of funding for low-carbon electricity agreed in the levy control framework. The Quad discussions, to which I attributed the successful agreement on a decarbonisation target, also concluded an arrangement on the levy control framework at a level that exceeded some expectations. The Government’s commitment makes it clear that we must support low-carbon generation to achieve our ambitions.
I do not want to overstate the matter, because overstatement is not my way, but the levy control framework is a landmark decision that has received widespread support from the sector, consumer groups and business representatives. They recognise that it adds certainty and opportunity for those who are making their own business plans, because they do so knowing that they are supported by a Government characterised by clarity and determination.
That brings me to the last of my four supplementary points—[Interruption.] No, I said there would be four supplementary points following my three points, which makes seven in total.
The Government are not complacent. We are taking practical steps to decarbonise the economy while ensuring security of supply. I will say a word about consumers, because they have been mentioned. Security of supply is the defining salient for a Government, because if we were to fail to provide that, we would not only damage the well-being of our citizenry but jeopardise the performance of our economy. Energy supplied securely at the right cost is critical, both socially and economically. Also, we must be mindful of the cost to consumers, which we spent a good deal of time debating this morning.

[Mr Edward Leigh in the Chair]
Make no mistake, both sides of the Committee are determined that consumers should get the best deal, but I would go further than many. I believe in the redistribution of advantage. Many Labour Members would not say that now; they used to say it more often—I do not mean to be unkind, of course. Redistributing advantage means taking practical steps to support the most vulnerable in our society, because we cannot build a society that coheres without founding it on social justice. We must apply those principles to energy, just as we apply them to other areas of public policy, using the levers at our disposal to ensure the vulnerable are protected. Although supporting the sector is important, and the big energy companies are part of the sector, we will never sacrifice the interests of consumers, and particularly the most vulnerable, to some other purpose.
The Committee on Climate Change says that the levy control framework gives confidence. The settlement in the Bill provides a basis for investment, said the CBI. The commitment to a low-carbon future was welcomed by the renewable industry. I believe that the Government have succeeded. With these proposals, they have achieved what any Government would wish: clarity, certainty, the potential for investment, the protection of consumer interests and the determination to decarbonise our economy.
 Peter Aldous (Waveney) (Con) rose—

John Hayes: This gives me a chance for another peroration, so with that prospect in mind I give way to my hon. Friend.

Peter Aldous: I am grateful to the Minister for giving way and for explaining so passionately the reasons for the new clause. One reason that has been advanced for including a decarbonisation target in the Bill is that it is needed to prevent a possible hiatus in investment in the renewable sector in 2020. Does the new clause provide a framework within which one can establish a decarbonisation target before 2016?

John Hayes: It provides the opportunity to put in place a decarbonisation target in line with the fifth carbon budget. That is the link. We are not talking about a particular date for its own sake, but a date that relates to the fifth carbon budget.
I know that my hon. Friend is a great champion of his constituents and their economic interests, and I met some of them with him this week. I simply tell him that Dr Kennedy, the chief executive of the Committee on Climate Change said:
“What you have to do is find a balance between providing certainty to investors, particularly to supply chain investors, and then have flexibility to respond to unforeseen circumstances. You do not want to write a blank cheque to the industry. Let us be clear about that. It cannot be decarbonisation at all costs. That is why you design a target to allow you to relax the ambition, for example, if costs do not come down as we currently think that they will.”––[Official Report, Energy Public Bill Committee, 17 January 2013; c. 98, Q283.]
Dr Kennedy—not me—made the case for flexibility. He said that we should fix the target in terms of prevailing circumstances, anticipating the fact that we will need to adjust our thinking according to those circumstances. The advocates of decarbonisation are clear and resolute that we have this right. I will give way one last time before I bring my remarks to an exciting conclusion.

Barry Gardiner: Does the Minister not recall that when Dr Kennedy was making those remarks, he said that that was precisely why the Committee on Climate Change had accepted that the flexible target could be as much as 100 grams per kWh, and that it should not simply be confined to 50 grams? In fact, I think the figure that was being talked about at that stage was 40 to 60 grams.

John Hayes: The hon. Gentleman makes a point that he has made already, and by amplifying it he cements the point that the range and the figure both matter. The argument is not that when the target is set the figure will not matter; the argument is about when the target should be set and in what prevailing circumstances. As I said when we debated the matter a day or two ago, we are arguing not about a principle but about a process. On Second Reading, I accused the Opposition of dancing on the head of a pin. I slightly regret doing so, because it was a tad critical and I do not like to be unnecessarily hard on them. That is not entirely fair, however; I think that they are dancing on the head of something slightly bigger than a pin—perhaps a 6-inch nail. None the less, let me be clear: agreement on this matter and on the Bill is far more significant in terms of the signal it sends out beyond this place than a disagreement about process or mechanism, which is essentially what we are debating in respect of the new clause. I do not necessarily expect the Opposition to agree with every word, but I hope that they will at least agree with that sentiment, and on that basis I beg to move that the clause be read a Second time.

Tom Greatrex: It is a pleasure to welcome you back to the Chair, Mr Leigh. It seems like only yesterday that we were discussing the decarbonisation target; in fact, it was the day before yesterday, and you were in the Chair at the time, so you heard the debate about the target. Now we are debating Government new clauses on the process of setting the target.
In the third or fourth attempt at his peroration, the Minister invited us to agree with his view that we are talking not about the signal we send but about a process, and that the signal is more important. I will explain why I think that, perhaps unintentionally, the Government new clauses send some very worrying signals.
Earlier in his comments, the Minister said that the Government new clauses were designed to achieve decarbonisation at the least cost option, and the clauses were consistent with that aim. The logic of that position would therefore dictate that he agree with the Committee on Climate Change, which said that 50 grams per kWh was the least cost option. I appreciate that logic does not always follow in oratory, but I will leave him to consider that point.
Earlier this week, in this very room, the Government rejected setting a 2030 decarbonisation target; our discussion was on Tuesday morning and the Division was on Tuesday afternoon, if I recall correctly. I was not aware until after I left the Committee Room that on the same day—indeed, at about the time that we adjourned—the Deputy Prime Minister was giving evidence to the Liaison Committee, and made a point about being in support of a 2030 decarbonisation target; in fact, he was effusive in his explanations of its importance and his reasons for supporting the target. That was on the very same day that two of his Members of Parliament voted against having such a target in the Bill. The hon. Member for West Aberdeenshire and Kincardine referred to the reason for that being issues around what was in the Liberal Democrat manifesto. We all know how important the contents of Liberal Democrat manifestos are. That was the reason he gave, and the reason why we have missed the chance to have a decarbonisation target in the Bill and instead are talking about Government new clauses to give the Secretary of State power to set a target.
I do not think that we need legislation to give the Secretary of State a power to set a target. He can set a target already, at any point, using any other vehicle. In our sitting on Tuesday, the Minister said
“let us be absolutely clear at the outset: this is not a debate about principle, as some have argued. The principle, that it would be useful and of value to set such a target, is established. The debate is not about that, but about process and timing.”––[Official Report, Energy Public Bill Committee, 5 February 2013; c. 489.]
That seems to be a way of saying, “Move along now; there’s nothing much to see here.” However, despite the Minister’s assurances that the matter of whether a target is useful and of value has been settled, the wording of the Government new clauses seems to indicate something quite different. New clause 8(2) states:
“The Secretary of state may by order…set or amend a decarbonisation target range in relation to a year.”
As we have already debated many times, wording is very important. Indeed, some of the arguments the Minister and his ministerial colleague have used against Opposition amendments have been about the precision of their wording. The wording of the Government new clause states that the Secretary of State “may” set a target. It does not say that he will, must, or is obliged to; simply that he “may”. That means the argument about whether there should be a target is not settled, and it certainly does not accord with the Minister’s statement in the debate earlier this week that the principle of setting a target “is established.”
The Government have already set themselves a number of targets on various issues. There is a target for cloud computing, which was set in 2011; a target for the level of food bug in chickens, which was set by them in 2010; and a target for the use of sustainable palm oil, which was set last year, and about which I understand from correspondence there will soon be an order involving the Department of Energy and Climate Change. The Government do not always meet their targets, but the point is that targets have already been set. Although my expertise on sustainable palm oil may develop ahead of the introduction of the statutory instrument, I cannot pretend that it is huge—I know very little about cloud computing or about chickens and bacteria—but I doubt that the process of setting those targets was as confusing and contradictory as this one.
Secretaries of State set many targets, and it is not always necessary to use primary legislation to give them the power to do so. Legislation is used to set such targets, but the Secretary of State already has the power to set a target to which the new clauses will add nothing. The impact of the new clauses—the point made, in his very constructive way, by the hon. Member for Waveney—is that the earliest year in which the target might be set, if it is set at all, is 2016, which is when the carbon budget for 2030 will be set. Crucially, however, there is ambiguity in the drafting of new clause 8.

Barry Gardiner: Will my hon. Friend remind me whether that target is also after the next general election?

Tom Greatrex: It is, indeed, after the next election.

Dan Byles: We can move the general election back.

Tom Greatrex: The hon. Gentleman suggests an extension to the Fixed-term Parliaments Act 2011 to take us even further, which may be the only way he can be on the Government Benches after the next election.
Despite the Government’s assurances that 2016 is the intended date, nothing in new clause 8 will compel them to set a date at that point. It provides only that
“the first decarbonisation order may not be made before the date on which the carbon budget for the budgetary period which includes the year 2030 is set.”
The Government cannot set a target until 2016 at the earliest, but there is nothing to compel the Secretary of State to set a target in 2016, 2017, 2018 or any other year.
The Minister argued that it is right to wait until the carbon budget for 2030 is set and that, in any event, we already have the toughest climate change targets in the world. However, the hon. Members for North Warwickshire, for Bracknell, for South Thanet and for West Aberdeenshire and Kincardine made this recommendation in the Energy and Climate Change Committee’s pre-legislative scrutiny report:
“Although statutory carbon reduction targets are set out in the Climate Change Act 2008, these are economy wide, rather than sector specific. We conclude that providing greater clarity about the contribution that the power sector is expected to make towards meeting these targets would help to provide certainty to investors.”
Andrew Buglass from the Royal Bank of Scotland and the Low Carbon Finance Group, said in his evidence at the start of the Committee’s proceedings that a 2030 target
“is absolutely critical from the conversations I have with potential supply-chain investors because they quite rightly point out that it is very difficult for them to take investment to their board if they really only have visibility on three or four years-worth of work.”––[Official Report, Energy Public Bill Committee, 15 January 2013; c. 51, Q154.]
The kindest way—I am disposed to be kind, as far as I can—of describing the Government’s new clauses on the decarbonisation target is muddled. To be clear, they may or may not, at some point in the future that has yet to be defined and may in fact never be defined or reached, set a decarbonisation target range for the carbon intensity of electricity generation in Great Britain, although the definition of carbon intensity and the means of calculating it can be changed by the Secretary of State, who by the way can revoke the order.
The lack of clarity in the new clause is concerning, even by the standards of a Bill that has significant gaps. The subsection on the revocation of a decarbonisation order is almost incomprehensible:
“The Secretary of State may not revoke a decarbonisation order unless, in respect of each year in relation to which the order sets a decarbonisation target range, a decarbonisation target range remains in effect.”
One way of reading that is that the Secretary of State can revoke a target only if it remains in effect, which I do not consider hugely clear.
I looked back at our discussions earlier this week, because the Minister made a number of comments. On several occasions, he suggested that the debate we were having was not so much about whether a target should be set but more about the methodology, process and timing for setting the target. He said:
“The principle, that it would be useful and of value to set such a target, is established.”––[Official Report, Energy Public Bill Committee, 5 February 2013; c. 489.]
A little later, he said that
“the Government intend to do just what the members of the Committee—particularly those who have spoken from the Opposition Benches, but actually from the whole of the Committee—have said is necessary: to signal our intent”,
and then:
“So there is no debate about our ambition, about the principle or about the efficacy of establishing a target that allows us to gauge the effect of the Bill.”––[Official Report, Energy Public Bill Committee, 5 February 2013; c. 490.]
He also said:
“We are arguing, are we not, about how that power is expressed and when that target is set? There is a debate about not the fundamental matter of a target but the detail of the Bill.”––[Official Report, Energy Public Bill Committee, 5 February 2013; c. 496.]
If that is the case and it is the Minister’s position, the new clauses are deficient, because they give his Secretary of State and future Secretaries of State the opportunity not to set a target at all. It is not only about the timing and the process but about whether there is a target. That returns to the points made by the Minister during his contribution. We have heard them a number of times, and I and almost every Member who has spoken in the Committee during the course of the past few weeks talked about the clarity and certainty and their importance for investors.
I had an e-mail earlier today from a significant potential investor in this country, a foreign company seeking to invest in our manufacturing and supply chain. The e-mail commented in particular on proposed new subsection (5) in new clause 8:
“The earliest year in relation to which a decarbonisation target range may be set is 2030; and the first decarbonisation order may not be made before the date on which the carbon budget for the budgetary period which includes the year 2030…We are puzzled by the logic of legislating to prohibit the setting of a carbon-intensity target for any year before 2030. This means that not only would HMG not commit within the Energy Bill to set a target before 2016 for the year 2030 but it would go further than that by prohibiting the setting of a carbon-intensity target for any earlier year, regardless of future circumstances. What can be the logic underlying such a proposal; in tying the hands of future parliaments in this way?”
The provision appears to send a signal to investors that does not add to clarity and detracts from our current position.
Will the Minister address another point? Proposed new subsection (8) repeals section 5 of the Energy Act 2010 which, among other things, obliges the Secretary of State to report on the progress of the development of carbon capture and storage. The Minister has said a number of times how much he values the potential of CCS—as I do too; he said why it is so important and that it is a crucial part of the Bill. Can he explain therefore the rationale behind repealing the duty to report on CCS? It appears to send a signal to investors that the Government are not that serious about it. Added to the other deficiencies I highlighted, it all sends a signal that important as he says the Bill is, and as probably most of us agree because we have devoted a huge amount of time and effort to understanding it—Opposition Members probing it and Government Members defending it—it is actually not important; what is important is the gas strategy the Government produced with the help of the Treasury. That is why we are particularly concerned about the new clauses.
I finish with another quote from the e-mail I received this morning. At present, I am not at liberty to say which company it is from, although I understand that in the near future—before Report, I suspect—it and others may make their views much more public, because the issue is crucial to future investment. It is a serious, large overseas company that wants to invest in our manufacturing and supply chain, which we all say is so crucial to driving jobs and growth in the UK. The company said:
“We fear that the inevitable message to the wider world would be one which increases rather than assuages concerns about the decarbonisation commitment with all the predictable consequences for the pace of development, economic growth and job creation in the UK which is under consideration by major manufacturing companies.”
Those concerns are driven not by politics, but by a company that wants to invest, is seeking to invest, and has the capital to invest, but it will make the decision to invest only if it is clear about where the Government and the country are going. The new clauses were tabled to deal with the issue. It was flagged up by the Select Committee, in pre-legislative scrutiny, by Members on both sides of the House, even by the Deputy Prime Minister yesterday, by the Liberal Democrat conference, and by the plethora of organisations and companies we cited earlier. That is why the matter is so important. The new clauses do not do the job. They are not good enough, and they give the Government a way out of even seeking to set a target, despite the way they are described. Those are the reasons why the new clauses are not good enough, and why we oppose them.

John Hayes: The shadow Minister claims the new clauses are lacking. Let me go through some of his points in particular detail. The need for a power to set a target if we want a legal duty to meet a target is vital, and is provided in the new clauses. That is the duty found, as he knows, in first part of new clause 8. The Secretary of State cannot revoke a decarbonisation order unless there is still a target range in place. Our reporting framework provides for an annual report on decarbonisation as a whole, and there is no need for a three-yearly report under the 2010 Act. The shadow Minister knows that Government provisions take the critical step of establishing legal authority for the setting of a future binding decarbonisation range for the power sector here in the new clauses.
If the Government were, as the shadow Minister describes, looking for a way out, would we have put the power in the new clauses in the Bill at all? Would we have chosen to set these constraints on a future Secretary of State when considering the fifth carbon budget? Would we have been debating this matter at the length we have in the Committee? Of course the answer to all those questions, as the Committee and you, Mr Leigh, will know, is no.
It is critical that the Committee understands that the issue here is not one of principle. The new clauses provide that power. The hon. Gentleman is right, and I made the point to my hon. Friend the Member for Waveney. It is true that if the target is set in concert with the fifth carbon budget, we cannot say that it must be done in a given week, on a given day, or in a given month. It will be done in harmony with the information provided in the context that that information gives rise to in the conditions prevailing at the time. That is at the very heart of the Government’s position. Is that inflexibility unreasonable and unwelcome? It is certainly not unwelcome to the Committee on Climate Change, as I said earlier.
I want to be brief, but I am a sucker for the hon. Member for Brent North, so I give way to him.

Barry Gardiner: The Minister said, “Would we have put the power in the Bill. No.” He also said, “Would we have spent all this time discussing it? No.” Would we have put “may” instead of “must” in clause 2? The answer is also no.

John Hayes: A reasonable feature of opposition is not cynicism, but suspicion about Governments. Suspicion is an important part of the business of opposition, and a healthy part of the interface between both sides of the Committee. There is scepticism rather than cynicism, and I do not criticise hon. Members for that. I absolutely know, however, that while there is arguably an illogicality about who I am and what I say—in the hon. Gentleman’s eyes at least—there is no lack of feeling. I reject the Enlightenment’s excessive emphasis on logic. I believe that the Bill is about intent, feeling, belief and purpose, and those are things that began long before the age of reason and will last long after it. Such things are at the heart of my party and my values. The Bill is full of that belief and purpose. It is full of the determination and drive that has typified the Governments led by my party through the ages. It is with that spirit and that determination, with that belief that the Bill provides certainty, with that understanding that, while targets matter, weapons matter most. The Bill provides the weapons, which no Government before us have provided, for us to hit the targets. It is in that spirit that I commend the new clauses to the Committee. Should the Opposition choose to divide the Committee, we would welcome that as well, because it is their right and, some might say, their duty.

Question put and agreed to.

New clause 8 accordingly read a Second time, and added to the Bill.

New Clause 9  - Matters to be taken into account

‘(1) The following matters must be taken into account by the Secretary of State in setting or amending a decarbonisation target range.
(2) The matters are—
(a) scientific knowledge about climate change;
(b) technology relevant to the generation and storage of electricity and to the demand for and use of electricity;
(c) economic circumstances, and in particular the likely impact on the economy and the competitiveness of particular sectors of the economy;
(d) fiscal circumstances, and in particular the likely impact on taxation, public spending and public borrowing;
(e) social circumstances, and in particular the likely impact on fuel poverty;
(f) the structure of the energy market in Great Britain;
(g) differences in circumstances between England, Wales and Scotland;
(h) circumstances at European and international level;
(i) the duties of the Secretary of State under sections 1 and 4(1)(b) of the Climate Change Act 2008 (carbon targets and budgets).’.—(Mr Hayes.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 12, Noes 9.

Question accordingly agreed to.

Clause read a Second time.

Question put, That the clause be added to the Bill.

The Committee divided: Ayes 12, Noes 9.

Question accordingly agreed to.

New clause 9 added to the Bill.

New Clause 10  - Further duties of the Secretary of State

‘(1) As soon as is reasonably practicable after a decarbonisation order is made, the Secretary of State must lay before Parliament a report setting out proposals and policies for fulfilling the duty in section[Decarbonisation target range](1).
(2) Before laying the report under subsection (1), the Secretary of State must consult the Scottish Ministers and the Welsh Ministers; and the Secretary of State must send a copy of the report to them.
(3) The Secretary of State must in respect of each year—
(a) beginning with the year after the first year in which a decarbonisation order is made, and
(b) ending with the final year in relation to which a decarbonisation target range is set,
lay before Parliament a statement of the carbon intensity of electricity generation in Great Britain in relation to that year.
(4) Section[Meaning and calculation of “carbon intensity of electricity generation in Great Britain”]makes further provision in relation to subsection (3).
(5) The statement must include—
(a) a summary of the means by which the carbon intensity was calculated;
(b) in any statement after the first, a declaration of whether the carbon intensity has decreased or increased since the previous statement.
(6) In respect of any year in relation to which a decarbonisation target range is set, the statement must also include—
(a) a declaration that the carbon intensity in relation to that year was no greater than the maximum permitted level of the decarbonisation target range, or
(b) the reasons why the carbon intensity in relation to that year was greater than the maximum permitted level of the decarbonisation target range.
(7) The statement required by subsection (3) must be laid before Parliament not later than the 31st March in the second year following the year in respect of which the carbon intensity is being stated.
(8) The Secretary of State must send a copy of the statement required by subsection (3) to the Scottish Ministers and the Welsh Ministers.’.—(Mr Hayes.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 12, Noes 9.

Question accordingly agreed to.

Clauseread a Second time.

Question put, That the clause be added to the Bill.

The Committee divided: Ayes 12, Noes 9.

Question accordingly agreed to.

New clause 10 added to the Bill.

New Clause 11  - Meaning and calculation of “carbon intensity of electricity generation in Great Britain”

‘(1) In sections[Decarbonisation target range]and[Further duties of the Secretary of State], “carbon intensity of electricity generation in Great Britain” means grams of carbon dioxide equivalent emissions, measured per kilowatt hour of electricity generated in Great Britain (calculated consistently with international carbon reporting practice).
(2) For the purposes of subsection (1)—
(a) “carbon dioxide equivalent” means a gram of carbon dioxide or an amount of any other greenhouse gas with an equivalent global warming potential (calculated consistently with international carbon reporting practice);
(b) “Great Britain” includes—
(i) the territorial sea adjacent to Great Britain, and
(ii) any area for the time being designated by an Order in Council under section 84(4) of the Energy Act 2004 (a “Renewable Energy Zone” for the purposes of that Act).
(3) In this section—
(a) “greenhouse gas” has the meaning given by section 92(1) of the Climate Change Act 2008;
(b) “international carbon reporting practice” has the meaning given by section 94(1) of that Act.
(4) But the Secretary of State may by order make further provision about—
(a) the meaning of “carbon intensity of electricity generation in Great Britain” (including, in particular, the meaning of “Great Britain”);
(b) the means by which the carbon intensity is to be calculated;
(c) the meaning of “in relation to any year”;
and subsections (1) to (3) are subject to provision made by any such order.
(5) An order under this section is to be made by statutory instrument and a statutory instrument containing such an order may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(6) An order under this section may—
(a) include incidental, supplementary and consequential provision;
(b) make transitory or transitional provision or savings;
(c) make different provision for different cases or circumstances or for different purposes;
(d) make provision subject to exceptions.
(7) Before laying before Parliament a draft of a statutory instrument containing an order under this section the Secretary of State must consult the Scottish Ministers and the Welsh Ministers.’.—(Mr Hayes.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 12, Noes 9.

Question accordingly agreed to.

Clause read a Second time.

Question put, That the clause be added to the Bill.

The Committee divided: Ayes 12, Noes 9.

Question accordingly agreed to.

New clause 11added to the Bill.

New Clause 12  - Fees for services provided for energy resilience purposes

‘(1) The Secretary of State may require fees to be paid for services or facilities provided or made available by the Secretary of State in the exercise of energy resilience powers.
(2) “Energy resilience powers” are any powers exercised by the Secretary of State for the purposes of, or in connection with, preventing or minimising disruption to the energy sector in Great Britain (including disruption to the supply of fuel in Great Britain).
(3) The amount of any fee charged under this section is—
(a) such amount as may be specified in, or determined by or in accordance with, regulations made by the Secretary of State, or
(b) if no such regulations are made, an amount specified in, or determined by or in accordance with, a direction given by the Secretary of State for the purposes of this section.
(4) Regulations or a direction under this section may provide for the amounts of fees to be different in different cases and, in particular, for fees in respect of the exercise of the same power to be of different amounts in different circumstances.
(5) Regulations under subsection (3)(a) must be made by statutory instrument and any such instrument is subject to annulment in pursuance of a resolution of either House of Parliament.
(6) The Secretary of State must lay before Parliament a statement of any fees specified in, or determined by or in accordance with, a direction given under subsection (3)(b).’.—(Mr Hayes.)

Brought up, and read the First time.

John Hayes: I beg to move, That the clause be read a Second time.

Tom Greatrex: I want to ask the Minister about a couple of points regarding new clause 12, because I was not immediately clear on the thinking behind the clause. As it was tabled late there were no explanatory notes available; I sought some from his Department but it was not able to provide them, so perhaps the Minister could explain. The letter that accompanied the amendment stated that the charging power of the new clause will enable DECC to charge fees for providing energy-resilient services in the event of a disruption or threatened disruption to energy supplies. This will allow DECC to offer support services to businesses and to set fees for those services, in line with Government policy.
I wonder whether the Minister could say a few words about what disruption or threat of disruption is envisaged in this new clause, and whether this includes situations where there is a threat of a blackout, or disruption that arises from the possibility of industrial action? Could the Minister clarify to whom the fees charged under this new clause would apply, and what discussion he had with stakeholders about this new clause? I was not clear why this new clause was being included at such a late stage, and why it was not included in the draft Bill and therefore subject to the pre-legislative scrutiny that was undertaken. Could the Minister explain a little bit more for the record, given that there were no explanatory notes available when the clause was tabled?

John Hayes: That is a perfectly reasonable set of questions, which I will be delighted to respond to. This clause is a minor provision, as the hon. Gentleman implied. It will provide my Department with the ability to charge fees for providing energy services in the event of a disruption or threat of disruption to energy supplies. It will allow the Government to recoup some or all of the cost of support services provided to businesses, and to set appropriate fees for those services, as the hon. Gentleman suggested. It is an enabling power, and does not provide specific powers to charge for any specific service, set any fee or charge any rate.
I will give a brief explanation of its reason and purpose. Widespread disruption to fuel supplies was threatened last year during an industrial dispute between haulage companies and their drivers. That incident revealed the need for robust contingency plans to be put in place to safeguard supply. In those terms, supply essentially means the well-being of our citizens and the supply chains of goods and services that feed that well-being. The increasing possibility of floods or other emergency circumstances, such as extreme weather events, and the potential impacts of other risks, such as cyber-attacks, energy security and critical plant closures, have caused us to consider closely our resilience plans. We have been discussing what those plans should look like, how they might be framed and how they might be appropriate to the particularities of the emergencies I have described. The emergency might be of all the kinds—and others—that I mentioned.

Barry Gardiner: Will the Minister confirm that the powers might also be used in relation to a strike, perhaps of lorry drivers or others who withdraw their labour in respect of the delivery of fuel?

John Hayes: Yes, it might be that. As I said, the industrial dispute last year is an example of such an emergency. The situation is certainly not limited to that kind of emergency. The powers described by the hon. Gentleman are enabling powers, allowing us to apply the powers to specific circumstances. The new clause does not specify the precise nature of the emergency, nor should it.

Barry Gardiner: In such an eventuality, whom might the fees that the new clause speaks of be levied against?

John Hayes: The powers enable DECC to set fees for the provision of services. The new clause does not specify the organisations and individuals who would be charged. The service would be provided on a discretionary basis and the fees would be set in a way that provides transparency on the character of the fees, who will be charged, when, and how. The power does not specify the matters described by the hon. Gentleman. The character of the emergency would determine the kind of services that need to be procured, who might provide them, how much they might cost and how we might recoup the money for them.
The flexibility that is implicit in the enabling power is there not because the Government want to be capricious, but because the Government would need to respond to a set of circumstances the nature of which, by their very kind, cannot be anticipated.

Barry Gardiner: I am grateful to the Minister. He is helpfully trying to elaborate, but my question was more specific. What I am seeking to establish is, if a union took its members out on strike and that caused a disruption in the supply of energy, is it a possibility that the fees for the services that were put in place in order to replace that labour would be charged to the union? Is the new clause intended to be a strike-breaking clause?

John Hayes: If there was an event that disrupted the supply of energy products—I am using that term broadly, because of the variety of emergencies that could lead to such disruption, whether that be a natural hazard, industrial action or malicious attack—the Government would certainly want to be able to procure services flexibly and then to charge accordingly. The hon. Gentleman has given one example. One could envisage a scenario of the kind that he described, but we do not have anything particular in mind. We have not worked out a set of fees, nor have we defined a set of circumstances in the precise way that he described.

Barry Gardiner: I am grateful to the Minister, because I think the turf is beginning to be exposed. Will he clarify, in relation to the example that I have outlined, whether such fees would be levied against the normal recipients of the service, or could the fees be levied against the union that had withdrawn its labour? That is the essential point I am trying to establish, because if it is the former, I feel more relaxed than if it is the latter. If it is the latter, I for one would wish to vote against it.

John Hayes: The hon. Gentleman has now been very clear. I wholly appreciate the point. It will be charged to the companies who would use the service, not the unions. I do, by the way, for the benefit of the record, declare my interest as an associate member of the Association of Teachers and Lecturers. I do not imagine it would be involved in this, but none the less one likes to be scrupulous about such matters. So, not the unions, is the answer to the hon. Gentleman’s specific question.
The shadow Minister asked why this was not in the draft Bill. The issue was raised by the Treasury during the period of scrutiny. Frankly, I would have liked it to have been prepared for introduction but my officials have been working on it. Given its character, I have asked for it to be introduced now because it is important that we have these enabling powers. The Bill is an important vehicle for that. I am delighted to have had this short debate about it. Notwithstanding that these are very important questions, I do not think these powers are politically contentious. They are presented very much in the spirit that I have made the case for them, as enabling powers to deal with a range of emergencies. Frankly, until we know quite what the emergency looks like, it is hard to be more specific about the scale of response, the source from which that response would be provided or, indeed, the fee involved. Disruption to energy supply is at the very heart of this and the clauses are here because of the importance that has for the national interest.

Barry Gardiner: One further possibility in reading sub-paragraph (2) has just occurred to me. If the police or the Army were used to clear a way for transport of fuel that was deemed necessary under these clauses and the clearing of the way was against an official union strike and picket, can the Minister be equally explicit that there would be no recourse to charge the union for the clearance of the road and from any blockage by the picket in order to maintain the supplies? He is being very helpful and he will see that I want to nail him absolutely on this point.

John Hayes: Again, that is a perfectly reasonable question. Let me answer by giving some examples. I did not expect such a long debate on this. Is it not delightful that we are having it? It is important that all these things are scrutinised in detail and the Opposition are doing a fine job in testing me as I wish to be tested so that the Bill is right. Let me give some examples: the personnel that the Government could provide in the event of the widespread impact on workers of pandemic flu; equipment or vehicles that would be needed in extreme weather conditions to carry out repairs or to clean up an area effectively; the provision of assets to enable the critical component supply chain to remain viable in those kinds of events, or different kinds of events, in the short term until alternative options are identified. Those are all examples of where it might be appropriate to charge a business.
As I said, the genesis of our re-examination of our capabilities in this area was the widespread disruption to fuel supplies resulting from industrial action, but this is not solely about that kind of event; it was just that that event stimulated and encouraged us to think afresh about the provisions that we had in place. However, because the hon. Gentleman clearly wants a cast-iron assurance on the matter that he raised about the possibility of the unions being charged, let me say that the answer to his question is no, they would not be.

Tom Greatrex: I have a different point from the one my hon. Friend was pursuing. Given that the Minister said that this clause was some time in the gestation, which is why it was not in the draft Bill, did that time include consultation and discussion with the Road Haulage Forum, which is the tripartite body that was established and then reinvigorated after the recent dispute, to ensure that it is clear about the intention and consequence of this clause?

John Hayes: Yes. We have had discussions with both hauliers and the military, because of the possible need to involve the military in an emergency situation. I emphasise that, again, these are enabling powers and if any charges were to be made, they would be made in full consultation with the organisations concerned and they would either be based on full-cost recovery or set at a lower level, which the market could support. I am very happy to commit further that that process will be transparent. I would be more than happy to ensure that any calculation or discussion of that kind was open in terms of providing transparency about how any fees have been calculated and on what basis. Yes, of course, we have had discussions with a number of parties that might be involved in such an emergency circumstance.
With that, I hope that we can draw these important matters to a conclusion. Once again, if I may do so through you, Chairman, I thank Members for giving us the opportunity to have this debate and I hope, on that basis, we can move swiftly on.

Question put and agreed to.

New clause 12 accordingly read a Second time and added to the Bill.

New Clause 13  - Power to modify energy supply licences: domestic supply contracts

‘(1) The Secretary of State may modify—
(a) a condition of a particular licence under section 7A(1) of the Gas Act 1986 (supply licences);
(b) the standard conditions incorporated in licences under that provision by virtue of section 8 of that Act;
(c) a condition of a particular licence under section 6(1)(d) of EA 1989 (supply licences);
(d) the standard conditions incorporated in licences under that provision by virtue of section 8A of that Act.
(2) The power under subsection (1) may be exercised for the purpose only of—
(a) promoting competition in domestic supplies of gas and electricity; or
(b) requiring licence holders to change the domestic tariffs or other terms of domestic supply contracts so as to reduce the costs to their domestic customers for supplies of gas or electricity.
(3) A modification under subsection (1) may, in particular, make provision—
(a) requiring a licence holder to adopt one or more standard domestic tariffs;
(b) for specifying a limit on the number of domestic tariffs, or domestic tariffs of a particular category, a licence holder may adopt;
(c) about discretionary terms (and may in particular require the same discretionary terms to be offered in connection with, or incorporated into, all domestic supply contracts of any particular category);
(d) for requiring a licence holder to provide information about its domestic tariffs and other supply contract terms, including information for enabling or facilitating the comparison—
(i) of different domestic tariffs or supply contract terms of the licence holder;
(ii) of domestic tariffs and supply contract terms of different licence holders;
(e) for requiring a licence holder to change the domestic tariff or other supply contract terms on which it supplies gas or electricity to a domestic customer by—
(i) switching to a different domestic tariff or different supply contract terms, unless the customer objects, or
(ii) offering the customer, or inviting the customer to switch to, a different domestic tariff or different supply contract terms.
(4) Provision that may be included in a licence by virtue of subsection (3)(d) may in particular—
(a) require a licence holder to provide each domestic customer with information—
(i) about the customer’s existing domestic tariffs and supply contract terms;
(ii) about the expected cost to the customer of supplies under the customer’s existing domestic supply contract and on one or more other domestic tariffs (including the lowest domestic tariff for the customer) or other supply contract terms of the licence holder;
(iii) about how to switch to different supply contract terms;
(b) make provision about the format in which information is to be provided, which may in particular require information to be provided—
(i) in the form of a code or otherwise in a format readable by an electronic device, or which facilitates processing of the information by means of an electronic device, or
(ii) in the case of information about a domestic tariff or supply contract terms, in the form of a single figure or set of figures.
(5) Provision included in a licence by virtue of the power in subsection (1)—
(a) may make provision for specifying how any domestic tariff (including a licence holder’s lowest domestic tariff for a customer), or other supply contract terms, is or are to be identified for the purpose of any relevant provision;
(b) may make provision about the calculation or estimation of any amount or figure for the purpose of a relevant provision, which may, in particular, include provision—
(i) about assumptions to be made;
(ii) requiring information about a customer’s circumstances or previous consumption of gas or electricity to be taken into account;
(c) may confer functions on the Secretary of State or the Authority;
(d) may make different provision for different kinds of domestic customers or different supply contract terms, or otherwise in relation to different cases;
(e) may make provision generally or only in relation to specified categories of domestic customers, domestic tariffs or domestic supply contracts or otherwise only in relation to specified cases or subject to exceptions;
(f) need not relate to the activities authorised by the licence;
(g) may do any of the things authorised for licences of that type by section 7B(5)(a), (6) or (7) of the Gas Act 1986 or section 7(3), (4), (5) or (6A) of EA 1989.
(6) The power in subsection (1)—
(a) may be exercised generally, only in relation to specified cases or subject to exceptions (including provision for a case to be excepted only so long as specified conditions are satisfied);
(b) may be exercised differently in different cases or circumstances;
(c) includes a power to make consequential modifications.
(7) In this section—
“discretionary terms”, in relation to a domestic supply contract (or proposed domestic supply contract), means the supply contract terms other than the principal terms;
“domestic customer” means a customer under a domestic supply contract;
“domestic supply contract” means a contract for the supply of gas or electricity at domestic premises wholly or mainly for domestic purposes;
“domestic tariff”, in relation to a domestic supply contract (or proposed domestic supply contract), means the principal terms of the contract;
“modify” includes amend, add to or remove, and reference to modifications are to be construed accordingly;
“the principal terms”, in relation to a domestic supply contract, means the terms of the contract of the types specified in an order under subsection (10);
“relevant provision” means any provision included in a licence by virtue of subsection (1);
“standard domestic tariff” means a domestic tariff some or all of whose terms are specified by, or in accordance with, a relevant provision;
“supply contract terms” means the terms and conditions of a domestic supply contract.
(8) For the purposes of the definition of “standard domestic tariff”, the terms that may be specified by, or in accordance with, a relevant provision—
(a) may include a term providing for a charge or rate to be fixed for a period specified by, or in accordance with, the provision, but
(b) may not otherwise include any term setting a monetary charge or rate.
(9) For the purposes of this section—
(a) gas or electricity is supplied on a tariff if the supply is made under a contract whose principal terms are the terms of the tariff; and
(b) a licence holder adopts a tariff if it supplies or offers to supply gas or electricity on that tariff.
(10) The Secretary of State may by order specify types of terms of a domestic supply contract (as to charges and other matters) which are the principal terms of such a contract.
(11) An order under subsection (10) may—
(a) include incidental, supplementary and consequential provision;
(b) make transitory or transitional provision or savings;
(c) make different provision for different domestic supply contracts or otherwise for different purposes;
(d) make provision subject to exceptions.
(12) An order under subsection (10) is to be made by statutory instrument.’.—(Mr Hayes.)

Brought up, read the First and Second time, and added to the Bill.

New Clause 14  - Section [Power to modify energy supply licences: domestic supply contracts]: procedure etc

‘(1) Before making modifications of a licence under section[Power to modify energy supply licences: domestic supply contracts](1) the Secretary of State must—
(a) publish the proposed modifications, and
(b) consult—
(i) the holder of any licence being modified,
(ii) the Authority, and
(iii) such other persons as the Secretary of State considers it appropriate to consult.
(2) Subsection (1)(b) may be satisfied by consultation before, as well as by consultation after, the passing of this Act.
(3) Subsection (4) applies where, after the consultation, the Secretary of State decides to make the modifications (whether in the form published under subsection (1)(a) or in a modified form).
(4) The Secretary of State must publish a statement of the decision, which must—
(a) contain details of the modifications to be made under section[Power to modify energy supply licences: domestic supply contracts](1);
(b) state when the modifications are to take effect.
(5) Where the Secretary of State makes a modification of the standard conditions of a licence of any type, the Authority must—
(a) make the same modification of those standard conditions for the purposes of their incorporation in licences of that type granted after that time, and
(b) publish the modification.
(6) A modification of part of a standard condition of a particular licence does not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of Part 1 of the Gas Act 1986 or Part 1 of EA 1989.
(7) The power in section[Power to modify energy supply licences: domestic supply contracts](1) may not be exercised after 31 December 2018.’.—(Mr Hayes.)

Brought up, read the First and Second time, and added to the Bill.

New Clause 15  - General duties of Secretary of State

‘(1) Sections 4AA to 4B of the Gas Act 1986 (principal objective and general duties) apply in relation to functions of the Secretary of State under section[Power to modify energy supply licences: domestic supply contracts]or[Section [Power to modify energy supply licences: domestic supply contracts]: procedure etc]of this Act with respect to holders of licences under section 7A(1) of that Act as they apply in relation to functions of the Secretary of State under Part 1 of that Act.
(2) Sections 3A to 3D of EA 1989 (principal objective and general duties) apply in relation to functions of the Secretary of State under section[Power to modify energy supply licences: domestic supply contracts]or[Section [Power to modify energy supply licences: domestic supply contracts]: procedure etc]of this Act with respect to holders of licences under section 6(1)(d) of that Act as they apply in relation to functions of the Secretary of State under Part 1 of that Act.’.—(Mr Hayes.)

Brought up, read the First and Second time, and added to the Bill.

New Clause 16  - Consequential provision

‘(1) The Utilities Act 2000 is amended as follows.
(2) In section 33 (standard conditions of electricity licences), in subsection (1)(f), omit “76 or”.
(3) In section 81 (standard conditions of gas licences), in subsection (2), for “or under Chapter 1 of Part 1 or section 76 or 98 of the Energy Act 2011” substitute “, under Chapter 1 of Part 1 or section 98 of the Energy Act 2011 or under section [Power to modify energy supply licences: domestic supply contracts] of the Energy Act 2013”.
(4) In the Energy Act 2011, sections 76 to 78 (power to modify energy supply licences: information about tariffs) are repealed.’.—(Mr Hayes.)

Brought up, read the First and Second time, and added to the Bill.

New Clause 17  - Powers to alter activities requiring licence: activities related to supply contracts

‘(1) In section 41C of the Gas Act 1986 (power to alter activities requiring licence), after subsection (4) insert—
“(4A) For the purposes of subsection (4), activities connected with the supply of gas include the following activities, whether or not carried on by a person supplying gas—
(a) giving advice, information or assistance in relation to contracts for the supply of gas to persons who are or may become customers under such contracts, and
(b) the provision of any other services to such persons in connection with such contracts.”
(2) In section 56A of EA 1989 (power to alter activities requiring licence), after subsection (4) insert—
“(4A) For the purposes of subsection (4), activities connected with the supply of electricity include the following activities, whether or not carried on by a person supplying electricity—
(a) giving advice, information or assistance in relation to contracts for the supply of electricity to persons who are or may become customers under such contracts, and
(b) providing any other services to such persons in connection with such contracts.” ’.—(Mr Hayes.)

Brought up, read the First and Second time, and added to the Bill.

New Clause 1  - Payment of winter fuel allowance to pensioners off the gas grid

‘Regulations shall be made to allow the payment of Winter Fuel Allowance payable under the Social Fund Winter Fuel Payment Regulations 2000 (SI 2000/729) to eligible persons whose main residences are not connected to the mains gas grid and whose principal source of fuel is home fuel oil, liquid petroleum gas or propane gas, no later than 30 September in each calendar year.’.—(Mr Weir.)

Brought up, and read the First time.

Michael Weir: I beg to move, That the clause be read a Second time.
It is a pleasure to appear under your chairmanship this afternoon, Mr Leigh. The new clause is on a topic I have raised many times in this House. In fact, I introduced a private Member’s Bill on it, which had support from hon. Members of all parties, including the my hon. Friend the Member for Ynys Môn and the hon. Member for West Aberdeenshire and Kincardine. That demonstrates the depth of concern over the off-gas-grid energy market, which we touched on early in our debates. It is important because 15% of all households in the UK are not on the gas grid and 32% of off-gas-grid households are in fuel poverty. Double the number of off-grid households are in fuel poverty compared with on-grid households. Not all of them are pensioners, but the statistic is stark.
The new clause does not seek to extend winter fuel payments to additional groups, nor does it tread on the contentious issue of means tests, which concern some hon. Members. It is tightly drawn to give relief to a particularly vulnerable sector: pensioners who are off the gas grid.
As all Committee members know, the price of all forms of energy is rising and home fuel oil is no exception, but there is clear evidence that the price of home fuel oil rises in early autumn and stays high over the winter period. If hon. Members look at www.valueoils.com, which sells oil, they will read:
“Winter months are typically more expensive than the summer given the rise in demand across Europe, the summer months of June and July will usually provide the lowest rates.”
The graph on the site shows a dramatic increase in all areas of the UK over the winter months. It is important to note that it is not only an issue for Scotland; it is as much an issue for the rural areas of Wales and England as it is for the highlands and islands of Scotland. Figures from the Oil Firing Technical Association suggest that a typical rural household could have saved £170 if heating oil was bought in June 2010 compared with January 2011, which would nearly double the value of the winter fuel allowance.
When I introduced my private Member’s Bill, the House of Commons Library produced a note that said: 
“The average costs of heating and providing hot water for a typical three bedroom house with LPG have been estimated at around £2,300 per year (based on April 2012 prices with a conventional boiler), heating oil is thought to cost around £1,700 and gas around £1,200.”
Those are very significant differences.
It is also worth noting that over the past four years, the cost of heating an average home with propane or home fuel oil has increased by £850 and £750 respectively, while gas has increased by £400—a significant figure, but much less than the off-grid supply. Not only are off-grid homes more expensive, but the costs are rising much more sharply. In short, it costs almost double to heat a home with LPG than a home with access to the mains gas grid. It is also important to note that the main use of LPG and home fuel oil is heating, so although the homes generally have electricity, they still face greater costs.
Traditionally, the Government have called for an extension to the mains gas grid as one means of tackling the problem; indeed, the Scottish Government recently announced a new scheme to do just that. Realistically, such schemes will help only those with gas mains nearby. Even then, the costs of linking to a gas main can be substantial and it will never happen in many rural and island areas where there is no gas grid.
The problem in many rural areas is exacerbated by the fact that much of the housing is old and constructed in a way that makes it difficult to install energy-saving measures, such as cavity wall insulation.
I am sure the Minister will tell me that those households will receive the same winter fuel allowances as pensioners on the gas grid, but the crucial difference is how the energy is delivered. Those on the gas grid will receive their winter fuel bill around the time that the winter fuel allowance is generally paid and it therefore works very well for them. Indeed, in their explanatory notes to the regulations that last amended the benefit, the previous Government specifically said:
“They are paid in a lump sum each winter to ensure that money is available when fuel bills arrive.”
That is not the case for those off the gas grid. They face the difficulty of having to pay for their LPG or home fuel oil up front at the beginning of winter, well before they have the benefit of the winter fuel allowance. Many find it difficult to do so and may well not fill up the tank completely, leaving them having to do so in the depths of winter, which brings problems of its own, as we have seen in recent weeks.
The OFT did a report and found that there were many competing suppliers in the market, but that by definition many of those were small suppliers. Although some of the larger players offer greater flexibility in payment, many smaller ones cannot. In reference to the earlier debate on new clause 6 and tariffs, it is interesting that the home fuel oil market has no tariff as such. Many people, when they phone to order the oil, are told the price for that day. That is not necessarily the price that is charged, because the price depends on what the price is on the day of delivery. Even when they order the oil, they cannot be sure how much they will have to pay, and that causes a great deal of concern. The price of fuel often rises quite substantially as winter approaches, and even those suppliers who offer a fixed winter price do so at a higher price than the summer price.
The current winter fuel allowances are paid as a result of regulations that specify a date by which pensioners must apply. It is worth noting that once they are on the system, they do not have to apply every year. If the Government’s problem with the new clause is on having an earlier date—that seems to be the import of their response to a report by the Energy and Climate Change Committee in 2012—they could keep the September date and simply allow payment to off-grid gas consumers at an earlier date from year two.
I have drawn the clause as simply as possible to allow the Government to look at regulations to implement it. There is nothing revolutionary about my proposal; it simply seeks a minor change to begin to address the problems of off-grid gas consumers by targeting a particularly vulnerable group. None of the problems are insurmountable with political will.
I have raised this issue before. I was pleased by what the Minister said about the possibility of a cross-party grouping, because I raised that with the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb) after discussions that I had with at least one major supplier indicated that it was at least prepared to look at some sort of social tariff idea. I believe that there have been some discussions with the Department for Work and Pensions on the matter, although I am not sure how far they have progressed since the industry body is now also becoming involved in this matter.
There is some movement on the matter, but for so long off-grid gas consumers have been put away and labelled as too difficult to deal with. As the Bill deals with tariffs and trying to get a better deal for gas and electricity customers, we should not forget that group yet again. The new clause is one way of doing it. It is not the only way, but it would give immediate help at relatively little cost.

Gregory Barker: I thank the hon. Member for Angus for raising this issue. We have an opportunity to go over ground that we have already covered to a considerable degree in our earlier debates, but I will resist that. I reiterate that I understand and appreciate his concerns about the pricing and supply of fuel for those who are not connected to the main gas grid. Many Committee members have a number of constituents affected in that way.
Winter fuel payments are made under the power contained in section 138(2) of the Social Security Contributions and Benefits Act 1992. Section 138 does not require the Secretary of State to make regulations for early payment of winter fuel payments to those not connected to the mains gas grid, as the new clause will. However, the powers under section 138 could be used to make regulations allowing for winter fuel payments to be made to individuals not connected to the mains gas grid no later than 30 September in any year.
We do not propose to use our existing powers in that way. However, our approach needs to reflect the need to deliver 13 million winter fuel payments a year in the most cost-effective and straightforward way. More than 95% of the 13 million winter fuel payments are made during November and December. That is the most valuable time to receive a payment for the vast majority of the recipients. Paying automatically means that people do not miss out.
I appreciate the logic of what the hon. Gentleman said, but bringing forward payment for that group is not straightforward. We do not hold the necessary information and to require everyone to complete claim forms to collect that information would be expensive and impractical. To send payments outside the normal payment cycle would also add great complexity and expense to the taxpayer at a time when there is unprecedented focus on reduction of calls on the public purse in order to deal with the deficit. We could consider bringing forward the payment date for all 13 million winter fuel payment customers, but we do not believe such an enormous change is desirable.
Let me explain. The timing of the payment currently coincides with the onset of winter, and so comes immediately ahead of the coldest winter months. That gives people the reassurance that they can turn up their heating in the knowledge that they have help towards higher bills. Evidence from the Institute for Fiscal Studies has shown that people put a substantial amount—estimated to be about 40%—of their winter fuel payment towards their fuel bill, even though the payment is a universal and unconditional benefit. Distancing the payment from the cold weather with which it is associated might have a detrimental effect on that mental accounting. People on lower incomes, who are most at risk of fuel poverty, might be more likely—through necessity or temptation—to spend their winter fuel payment on things other than fuel bills if higher winter fuel bills are less imminent.

Robert Smith: In the discussion that the Minister’s Department will have with the industry, and the discussions that the Department for Work and Pensions might have, will they look at the role that credit unions and other institutions can play? This is a cash flow problem. These pensioners miss out on buying fuel at the cost-effective time, so they find it more expensive to turn the heating up in the winter when the payment finally arrives.

Gregory Barker: That is a very thoughtful and useful contribution. I hope that my officials will capture that so it can form part of our discussions. I thank my hon. Friend.
Additionally, if the qualifying week for winter fuel payments was brought forward, say by a couple of months, from the end of September to the end of July, more than 50,000 new customers each year would receive their first winter fuel payment ten months later than is currently the case. That is because eligibility for a winter fuel payment is based on reaching women’s state pension age by the end of the qualifying week. We wish to avoid this negative effect. About 10% of households receiving winter fuel payments use oil, liquefied petroleum gas or solid fuels as their main source of heating. Bringing forward payments would have a disproportionate impact on the majority of older people who receive the winter fuel payment.
We are keen to assist the people that the new clause seeks to target. Older people who are not connected to the mains gas grid will be able to benefit from the Government’s programme of help with heating costs. For example, poorer pensioners might qualify for a warm home discount, now worth a record £130 this winter, on their electricity bills. Cold weather payments of £25 a week, which has been recently increased, go to vulnerable people in spells of exceptionally cold weather. The energy company obligation, which is running alongside the green deal, will ensure that help goes to low-income and vulnerable households to enable them to heat their homes more affordably on a long-term basis and improve the energy efficiency of their homes. Unlike previous schemes, an absolute amount of that funding is ring-fenced for the rural poor. I hope that the hon. Gentleman has found my explanation reassuring. I know that he might be disappointed that we cannot offer him exactly what he was seeking. None the less, I hope that he will consider withdrawing his new clause.

Michael Weir: The Minister is repeating his “all too difficult” line. His point about the winter fuel payment, if it is paid early, being away from the time when it is needed is wrong. If it was paid early for those who are off grid, it would arrive at the very time it is needed, so I am afraid he has grasped the wrong end of the stick.

Gregory Barker: With respect, I totally understand what the hon. Gentleman was saying. My point was that it is, I am afraid, a complex and difficult proposition to disaggregate those who are off gas grid from the rest of the 13 million people who receive the benefit. To move it for everybody to earlier in the year so that people who are off the gas grid could benefit in such a way would not be helpful to the vast majority who are not off gas grid. There is not a sense of cohesion there.

Michael Weir: I understand what the Minister is saying, but I am not sure that that is what he said about—never mind. I do not accept his point about the difficulty. In all other benefits, people have to fill in forms at regular intervals and report changes in circumstances. I do not see that any of that is insurmountable. Having said all that, I appreciate what he said earlier about the possibility of cross-departmental meetings. It is not great, but it is a step forward. I would like to think more about it. I will not press for a Division this afternoon and I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Alan Whitehead: On a point of order, Mr Leigh. In the absence of Government amendments relating to demand side reduction, which I had anticipated, is it your understanding that, should we divide on new clause 3, the Committee would then report that the business had been concluded on this subject, and amendments that might then be moved at a subsequent date would not be ruled admissible, because the issue had already been decided by Committee?

Edward Leigh: I am afraid that that is not a matter for me. Selection and grouping on Report is a matter for Mr Speaker.

New Clause 4  - Market access for independent renewable generators

‘( ) The Secretary of State must exercise the powers conferred by this Chapter so as to establish an auction market (the “green power auction market”) in which generators are entitled to offer, and holders of supply licences are entitled to bid for, electricity generated from renewable sources.
( ) The Secretary of State must exercise those powers, and take such other steps (including the exercise of any other power conferred by or under a provision of this Part) as the Secretary of State considers necessary, for the purpose of ensuring that—
(a) the green power auction market begins to operate when the first CFD is made and does not cease to operate until expiry of the last CFD that has been made; and
(b) the reference price under a CFD entered into by a generator who is a party to an agreement made through the green power auction market is based on the price payable to the generator under that agreement.
( ) In this section—
“CFD” means a contract for difference as specified in subsection 2(a) and (b);
“supply licence” means a licence under section 6(1)(d) of EA 1989.’.—(Dr Whitehead.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 9, Noes 12.

Question accordingly negatived.

New Clause 6  - Cheapest tariff

‘A company supplying electricity, gas or heating oil to a domestic customer shall, at least annually, inform the customer of the cheapest tariff available to that customer (based on that customer’s current method of payment and usage during the previous 12 month period) and move the customer to that tariff if that customer is aged 75 or over.’.—(Tom Greatrex.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 9, Noes 12.

Question accordingly negatived.

New Clause 7  - Extension or operation of renewable energy in Wales

‘Notwithstanding any existing legislation, Welsh Ministers shall have the power to grant consent for the construction, extension or operation of renewable energy generation up to 100MW on both sea and land in Wales.’.—(Albert Owen.)

Brought up, and read the First time.

Albert Owen: I beg to move, That the clause be read a Second time.
It is a pleasure to speak to this last new clause and to bring proceedings close to an end. The Labour party has been consistent with this new clause. In the previous Bill, we put it forward but did not have time to debate it. We have time now. I am sure that Opposition Members will feel a little aggrieved that we have put many good new clauses and amendments to the Committee but have not had them accepted. I was told that these two Ministers are generous, that at the end of proceedings they may be a little vulnerable and that generosity will shine through. I am hoping that that will be the case.
The new clause is important and would make only a minor change that I hope will be accepted. The Ministers are very reasonable people and support localism, accountability and bringing decision making closer to the people. Seeking these responsibilities for renewable—and just renewable—energy consent on land and offshore, up to 100MW, was part of the Labour party’s 2011 manifesto.
In addition, the Welsh Government wish to exercise the responsibilities. It is part of their programme of building renewables in an imaginative way. There the policies have the support of all the parties in the National Assembly for Wales. They have cross-party support there and I am sure that the Liberal Democrats and Conservatives here would wish to support their colleagues in Cardiff bay by supporting the new clause. It also has the support of the Local Government Association in Wales and RenewableUK.
The new clause has strong support, and would introduce important changes on consent. I know that the Minister has voiced his support for local accountability and for communities to be involved when it comes to wind development, for example. The new clause would help that. It would free up the planning system and make it easier for wind farms to be developed offshore and onshore up to 100 MW in Wales. I am sure that that is in tune with his and the Government’s thinking on localism and greater accountability for communities.
The First Minister has taken responsibility for energy measures in Wales, and I know that he has met DECC on a number of occasions. We have new Ministers now—a new Secretary of State and a new Minister of State—so perhaps the thinking will be different from what it has been in the past, or at least that is my hope tonight. The changes would affect the targets that the UK Government wish to reach as well. If the programme in Wales can be pushed forward at a faster pace, it will help the UK to meet its targets in the EU. It is therefore a win-win situation for the Welsh and UK Governments, and for meeting our EU targets.
In that spirit, I believe that the Minister will take on board exactly what has been said, follow his own instincts about local accountability and helping local communities, and support the new clause. It is important that we progress in Wales with renewables. The new clause would not touch the gas strategy, nor would it touch consent for any other form of energy. It would only affect renewables—not nuclear, not gas—so it would complement the Government’s road map for taking renewables forward. I await the Minister’s response and I hope that we can get full support in the Committee, as there has been from all parties in the National Assembly for Wales.

Gregory Barker: New clause 7 seeks to extend the competence of Welsh Ministers beyond the devolution settlement. It seeks to transfer consenting powers for renewable energy generating schemes of up to 100MW in Wales from the Secretary of State, the Marine Management Organisation and, in the case of smaller onshore schemes, Welsh local planning authorities.
The Government support decision making at the most appropriate level. For nationally significant energy infrastructure in England and Wales, as defined in the Planning Act 2008, we consider that the right decision maker is the Secretary of State. For offshore renewable projects of up to and including 100MW, that responsibility is presently vested in the Marine Management Organisation, under the relevant provisions in the Marine and Coastal Access Act 2009. We believe, I am afraid, that the present arrangements are fit for purpose in that they minimise delays and unpredictability, and ensure investor confidence in the decision-making process.
Our concern is that the new clause would only serve to fragment the decision-making process for renewable schemes in England and Wales, resulting in increased complexity, uncertainty for developers and investors, and more piecemeal and expensive development. That would ultimately pass on greater costs to consumers in England and Wales.
An apparent consequence of the new clause would be to transfer to Welsh Ministers ultimate responsibility for determining three of the five applications to build wind farms of more than 50MW in Powys, which are currently the subject of a joint public inquiry. That would mean that the decision-making responsibility for the three wind farms in question would change halfway—or more than halfway—through the process. It would, I suggest, be not only poor legislative practice to shift responsibility for making decisions while applications are still live in that way, but perverse from an administrative standpoint to split decision making between the Secretary of State and Welsh Ministers, when everybody agrees that the ways in which the different projects impact on each other are a key consideration overall. Moreover, major energy infrastructure in Wales is part of a national Great British infrastructure policy, and powers to consent such infrastructure are an integral component of that policy. The Government therefore believe that both policy and decision-making powers should remain with DECC Ministers.
The Welsh devolution settlement follows that policy, and the Government are clear that any requests for the further devolution of powers to Welsh Ministers should be considered in light of the recommendations of the Silk commission, which is due to publish its report on the second part of its work, reviewing the powers of the National Assembly for Wales, in spring 2014. The Government will need to consider those recommendations carefully before taking any decisions on changes to the devolution settlement.

Albert Owen: The devolution settlement was reached some 15 years ago. We are now in a position where many renewable schemes are above 50 MW, which is why there is a request for the competence to be reconsidered. Surely the Minister is not saying that the devolution settlement is written on tablets of stone, because there is a lot of bilateral agreement between Ministers here in Westminster and Ministers in the Welsh Government.

Gregory Barker: Of course I am not saying the devolution settlement is written on tablets of stone, but—as I have set out—we have serious concerns about complexity, fragmentation, uncertainty and, first and foremost, the implications for the devolution settlement. I reiterate that we will consider the matter in the context of the wider devolution settlement in light of the recommendations of the Silk commission in spring next year.
The Government disagree with the new clause.

Albert Owen: I guess it is down to me to be generous. I do not want to detain the Committee much longer, so I beg leave to withdraw the clause and reserve the right to reintroduce it at a later stage.

Clause, by leave, withdrawn..

Title

Amendments made: 134, in title,line1 after ‘provision,’ insert
‘for the setting of a decarbonisation target range and duties in relation to it;’.
Amendment 135, in title,line8 leave out ‘further fees in respect of nuclear decommissioning costs’ and insert
‘fees in connection with certain costs incurred by the Secretary of State; about domestic supplies of gas and electricity; for extending categories of activities for which energy licences are required’.— (Mr Hayes.)

Question proposed, That the Chair do report the Bill, as amended, to the House.

Edward Leigh: May I say what a pleasure it has been to chair this Committee? You have been exceptionally calm and well behaved, and I have much enjoyed the Ministers’ rhetoric, but the Opposition Front Bench team have been altogether more charming.

John Hayes: That is a contentious claim, Mr Leigh. Now that we have reached the conclusion of our convivial consideration, all that is left to me is to offer my gratitude, first, to you and your fellow Chairman. You have presided over our consideration of the Bill with immense charm, diligence, sagacity and benevolence.
The series of other people whom I wish to thank include: our Clerks, who have guided both you and us through our consideration and have helped to keep us in order; the Official Report writers, who have, as ever, painstakingly recorded our complex proceedings; the Doorkeepers, who always look after us so wonderfully; the officials and lawyers from my Department, without whom I would not have made the outstanding contribution that I have to this Committee, for which they deserve the vast bulk of the credit; and officials from the Ministry of Defence and the Department for Work and Pensions, who have been here to support the Government through various debates.
I also thank my fellow Minister, my right hon. Friend the Member for Bexhill and Battle. We have been wedded during these few weeks, have we not? Given our respective views that is a frightening prospect, but we have worked closely together. I am also immensely grateful to my Parliamentary Private Secretary, my hon. Friend the Member for Central Devon, to my right hon. Friend’s PPS, to my Whip and to all other members of the Committee. I include in that, by the way, the members on both sides of the Committee. I draw no difference between the members of the Committee, all of whom have made outstanding contributions.
Robert Peel has gazed down on us during our proceedings. I am not an immense fan of Robert Peel, because of course I do not take on board his radical views about the Corn Laws for one thing, but it was Peel who said:
“Agitation is the marshalling of the conscience of a nation to mould its laws.”
And we have indeed been engaged in moulding the laws of this country through the scrutiny of this Bill. I think that we can all take credit for doing that. The Opposition Front-Bench team have been immensely impressive in the way in which they have held Ministers to account, and that needed to be said on the record. We can also all take credit for the way in which the Committee has taken very seriously the fact that the Bill is for the future, not for the Parliament, and for the country, not for a particular party.
I will leave us, if I may, Mr Leigh, with the words of Yeats, because we have heard too little from him in this Committee. He may be the greatest of all the modern poets. Eliot and Yeats are the only contenders, and Eliot would have said Yeats, so that is good enough for me. Yeats said:
“Every conquering temptation represents a new fund of moral energy. Every trial endured and weathered in the right spirit makes a soul nobler and stronger than it was before.”
I hope that the trial that I have endured and weathered will make me both stronger and more noble.

Tom Greatrex: Could I join in the thanks to you, Mr Leigh, and Mr Bayley primarily, but also Sir Roger Gale and Mr Hood for the guidance given to us during the past few weeks? I also join the Minister in thanking the Clerks for their wise and considered advice to us, particularly those of us who have not done this before. It has been hugely helpful. I also record our thanks to the Hansard scribes. Being able to make some sense of my notes is a very impressive achievement. I also thank the Doorkeepers. Their skills in locking and unlocking doors have been tested a number of times this afternoon.
I would also like to place on record our appreciation for the Minister’s officials, because I know that they work very hard. There has been a stream of officials coming in and out at various points. I did notice the other day, when we were talking about the nuclear clauses, that a whole group of officials was outside and overheard me saying that I thought we would not be too long on this bit. I was not sure whether they were looking terrified because they had taken everyone out of the office to come here or delighted at the fact that there would not be too many questions, but I think we used the afternoon in another way.
At various times in the course of our consideration, Opposition Members have been accused of being long-winded and, on one occasion, of being surprisingly brief. Overall, though, we have probably—hopefully—got the balance right in seeking to scrutinise the Bill. I thank my hon. Friend the Member for Liverpool, Wavertree, who is on the Front Bench, all the other hon. Members from my party and the hon. Member for Angus, from the other Opposition party represented on the Committee, for their support and assistance in taking us through the Bill.
It would not be right to finish without reflecting on the lead Minister, the hon. Member for South Holland and The Deepings, and particularly his ability—he has done it again today—to tick off some more from his bumper book of quotes. We have heard from a range of different poets and others during the past few weeks, so I will leave us with a quote from Disraeli. I like quoting Disraeli back at the Minister, because I know that he is a fan of Disraeli.

John Hayes: My hero.

Tom Greatrex: A shared hero. Disraeli said:
“As a general rule, the most successful man in life is the man who has the best information.”
While we have been discussing the Bill, sometimes the Government have had more information than us, but that does not necessarily mean that we have not been able to make some successful points. We look forward to returning to some of them on Report.

Robert Smith: I would like to associate my hon. Friend the Member for St Austell and Newquay and myself with the thanks to all those who have been involved in making the Committee the success it has been. In particular, I pay tribute to hon. Members on both sides of the Committee for their constructive engagement. As the Minister said, that shows how important the subject of the Bill is to the country and the future.

Edward Leigh: Thank you for those comments. Meanwhile, I can put on my CV that I have chaired the proceedings on this Bill without understanding much of what has been going on, or indeed having to say a word in favour or against.

Question put and agreed to.

Bill, as amended, accordingly to be reported.

Committee rose.